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.
Investing for impact has gained more traction in recent years with the popularity of global agreements such as the Paris Agreement and the Sustainable Development Goals (SDGs). Further commitments from the global community, visible risks of climate change and deeper consciousness towards the high levels of poverty across the world; and the rise of globalization, migration and nationalism are projected to arouse higher interests in impact investing this year.
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. In a few years from now, impact investing is projected to be the norm for every business and society.
Read the full article about impact investing by ThistlePraxis at Medium.
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