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overview

Impact investing is an ethos that governs the selection of investment projects that benefit local communities and the environment. Impact investing is an active investment philosophy whereby investors pursue investments that offer a high social return and reasonable expected financial return.

Impact investing seeks to place capital in businesses and funds that can provide solutions at a scale that purely philanthropic interventions usually cannot reach. These investment strategies range from producing a return on capital to offering market rate or even market-beating financial returns to solve social and environmental challenges. Financing of such investments can take many forms including equity, debt, working capital, lines of credit and loan guarantees. Opportunities to invest for impact exist across a diverse range of sectors and geographies; successful examples in the recent decade include microfinance, community development investment funds and clean technology. Impact investors seek both financial and social returns and are purposefully investing in companies that deliver both.

Social Investments Booklet, October 2010