What returns should I expect from impact investing?
There are two main reasons why impact investing stacks up from a financial return perspective:
1. These companies are trying to do good and run their business sustainably.
Because of this, they’re arguably better equipped to operate in a world that is becoming increasingly focused on issues such as climate change or gender equality. Companies are having to adapt to increased regulation and investor expectation on environment and social issues and those that are already ahead of the curve in these areas could have an advantage.
2. These companies are addressing issues that the world needs to solve and they are doing it at scale, often using new technology to do so.
The companies that do this well are really the companies of the future, and have the potential to offer positive returns. The data is now proving this to be true. While impact investing is still a relatively new area of the investing industry, the data from impact investing funds shows that investors don’t need to give up any returns when investing this way.