UK consumers interested in different types of investing soon become aware that there are a wide range of different approaches offered. Impact investing is a specific investment strategy designed to generate beneficial environmental or social effects while still delivering financial gains.
Increasingly popular among those seeking an ethical yet profitable strategy, impact investments can take the form of several different asset classes and can result in a diverse selection of specific outcomes. The key purpose of impact investing is to use investment capital and money to achieve positive social results.
Understanding the term Impact Investing
While the expression “impact investing” was originally coined in 2007, the practice itself was developed many years earlier. In basic terms, the goal of impact investing is to assist in reducing the negative effects that business activity can have on our social environment. As a result, many consider impact investing to be an extended from of philanthropy.
Investors practicing impact investing may consider commitment to social responsibility of the company they are obtaining assets in or its duty to serve society positively as a whole.
Different types of impact investing
Two approaches of impact investing include environmental, social, and governance (ESG) investing and Socially Responsible investing (SRI). While impact investing is designed to aid the social environment, it can still be highly lucrative. According to statistics from the non-profit Global Impact Investing Network (GIIN), over 88 per cent of impact investors report that their investments meet or exceed expectations.
If you have questions about ethical investing, contact Hartey Wealth Management today for independent financial advice in Chester and Shropshire.
