Definition
Impact investing intentionally targets measurable positive social or environmental outcomes alongside financial returns. Unlike ESG integration or SRI screening, impact investing actively seeks investments that address specific problems like affordable housing, clean energy, or healthcare access. Impact must be measured and reported.
Example
A fund invests in microfinance institutions providing loans to underbanked communities, measuring both financial return and poverty reduction.
FAQ
What is Impact Investing?
Investments made to generate positive social/environmental impact alongside returns.
Why is Impact Investing important?
Impact Investing helps investors evaluate ESG and make more informed decisions.