Giving Compass' Take:

• Jean Case, writing for Business Insider, explores how impact investing has become a movement that is laying a solid foundation in our economy. 

• What are some successful examples of impact investing practices? How are philanthropists leveraging impact investing for social good projects?

•  Check out the Giving Compass Impact Investing Magazine. 

In recent years, there has been a quiet revolution taking shape across our economy. A growing movement led by passionate pioneers out to change the world has been slowly but surely expanding. A growing chorus of fearless leaders have been championing the idea that businesses can be a powerful tool for social good, beyond the jobs that they create, while also retaining a focus on profit and growth. And the markets have responded.

Some might call this revolution a form of Capitalism 2.0, as it represents a new class of investors and business builders and entrepreneurs who are locking arms and building a new economy wherein companies bring forward products and services that address daunting social challenges, while at the same time generating compelling financial returns for investors.

Known as impact investing, this movement has experienced considerable traction and momentum in recent years, with 2018 bringing the total of Assets Under Management (AUM) in this category to over half a trillion dollars. The year-over-year growth rate shows great promise, as well, with the total AUM rising from $114 billion in 2016 to $228 billion in 2017 to $502 billion in 2018.

Today, the impact investing movement comprises a growing list of traditional banks and investment firms, including the world's largest asset management firm, BlackRock, joined by Bain Capital, Goldman Sachs, JP Morgan, Morgan Stanley, Citibank, Bank of America and TPG, just to name a few. Taken together, the potential scale and influence of these firms signals a bright future for the impact investing.

There is a growing and robust community of entrepreneurs and business leaders driving this global movement of business as a force for good. From the creation of a new legal status, the Benefit Corporation, to a much broader movement of companies who commit to intentionality, measurement and transparency around social and environmental impacts, these new classes of companies are ushering in a new era of businesses committed to positive impact, and with it a new kind of capitalism.

 

The innovation many of these young companies are bringing forward is getting the attention of business media with many features in Forbes, Fast Company, Financial Times, Fortune, Inc and the Wall Street Journal, to name a few. B Corps and impact companies have consistently populated Fast Company's Most Innovative Companies annual list, with Warby Parker and Revolution Foods taking top spots.

And while most know the Warby Parker brand for their hip eyeglasses, lesser understood has been the positive social impacts of their success — the company recently announced that it has provided more than 5 million pairs of eyeglasses to those in need through their buy-a-pair-give-a-pair program, while at the same time achieving a coveted status of any young company — joining the ranks of rare successful startups whose value exceeds $1 billion.

Read the full article about impact investing by Jean Case at Business Insider.