Positive Outcomes

Impact investing without sacrificing returns or profits

For those looking to make the world a better place, but not wanting to sacrifice returns or profits, impact investing aims to support a positive social or environmental impact as well as looking to achieve compelling financial returns at the heart of sustainable investing.

The term ‘impact investing’ was first coined in 2007, although the practice developed many years earlier. It seeks to generate both social change and a return on capital, and it ends the old dichotomy where business was seen solely as a way to make a profit, while social progress was better achieved through philanthropy or public policy.

Not a recent phenomenon

Socially responsible investing is not a recent phenomenon; it can actually be traced back several centuries. Early initiatives were all based on the exclusion of controversial sectors such as tobacco or armaments rather than on investing in businesses which have the power to do good, which is what impact investing is seeking to achieve.

The upward swing of impact investing is being led by millennials. This type of investing considers a company’s commitment to corporate social responsibility (CSR), or the sense of duty to positively serve society as a whole, before becoming involved with that company. This societal impact differs depending on the industry and the specific company within that industry, but some common examples include giving back to the community by helping the less fortunate or investing in sustainable energy practices.

Social and environmental themes

There was a time when super-rich individuals and their families would come together to identify promising opportunities to make money and do good at the same time. But increasingly, investor impact strategies are now covering a broader range of social and environmental themes, and in many cases harness the latest technology or pioneer delivery systems to gain efficiencies and reach those most in need.

Impact investments can be made in both emerging and developed markets and target a range of returns depending on an investors’ strategic goals. The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, micro finance, and affordable and accessible basic services  including housing, healthcare and education.

Challenging previous long-held views

Impact investing challenges the previous longheld views that social and environmental issues should be addressed only by philanthropic donations, and that market investments should focus exclusively on achieving financial returns. The impact investing market directs capital to enterprises that generate social or environmental benefits, and offers diverse and viable opportunities for investors to advance social and environmental solutions through investments that also produce financial returns.

Looking for the potential to generate positive outcomes?

Impact investing provides the opportunity to make investments that not only deliver financial returns, but also have the potential to generate positive outcomes that address some of the most imperative challenges that we face as a society, such as climate change and poverty. To find out more, call us to arrange a meeting or simply ask a question. We look forward to hearing from you.

Information is based on our current understanding of taxation legislation and regulations.

Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. you may not get back the original amount invested.

Past performance is not a reliable indicator of future performance.

Recent News

17 Jan
Time to give your financial future a boost? The end of the tax year on 5 April is fast approaching, so make sure you’ve made the most of your annual allowances before it’s too late. No matter what,...
 
10 Jan
Making new year’s tax saving resolutions At this time of year, we think about New Year’s resolutions, and it’s also a good time to start planning our tax affairs before the end of the tax year on 5...
 
21 Dec
Financially squeezed between elderly parents and children Faced with the task of caring for elderly parents alongside your children, being in the Sandwich Generation can be a testing time. Finding...
 
19 Dec
Fairstone, one of the UK’s largest Chartered Financial Planning firms, today announces that Darlington-based Belasis IFA has been fully acquired by the business, the fifth acquisition in recent...