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Giving Compass' Take:
• The author discusses how impact investing has gained traction in the past few years to help solve social issues and take on the SDGs. However, impact investors must create new approaches that focus on various paradigms.
• Which methods have been successful for impact investors so far?
• Check out the Giving Compass Impact Investing Magazine to learn more.
Within the business community, the concept of sustainability has evolved beyond creating long-lasting and enduring businesses to making strategic, longer-term results and resource conserving decisions. By adopting sustainable practices, forward-thinking companies are gaining competitive edge, increasing their market share and boosting shareholder value. More businesses are not only fixated on making financial returns but have also incorporated environmental and social concerns into their decisions, strategies, and operations.
Impact investing seeks to generate competitive financial return while addressing environmental, social and governance needs. It aims at solving social and environmental challenges while generating profit and reinforces governments’ efforts in providing social services and basic amenities to the society.
There is still a huge gap in the undertaking of impact investment beyond philanthropic activities or a trade-off between financial gain and social impact. Impact investing involves profitable businesses around social problems-when for-profit investment capital supplements philanthropy in addressing social and economic challenges.
According to Acumen, the future of impact investing depends on our ability to embrace what we have learned over the course of economic history. Solving social issues require both private and public capital; a combination of risk-seeking investors and incentives and subsidies from public actors to make it easier and more attractive to reach under-served segments of the population.
While all forms of impact investing have the dual motive of generating both financial and social gains, investors can approach it through: impact only, impact first and finance first paradigms in order as long as they ensure the creation of jobs, provision of critical goods and services as well as social and environmental benefits.
Read the full article about impact investing from ThistlePraxis at Medium.