Which are the most important reasons why impact investing allows you to “do good while doing well? After a research and based on the article: “10 Reasons Why You Should Consider Impact Investing of Forbes Magazine” we defined 3 main:
1.Play an active role in shaping our future:
Industrialization and accelerated consumption have deteriorated the environment and human health, and has increased social, such as inequality, by the time you need to access education and health opportunities. For this reason the triple bottom line theory raises sustainability within businesses, as a set formed by people, the earth planet and profit, which means, as a part of its whole value chain, organizational structure, and business core, not only as a department that reduces the environmental social impact caused by them.
“Impact investing can eradicate poverty, wipe out hunger, attain food security, expand access to quality healthcare services and education, achieve gender equality, ensure justice and promote peace – just to name a few goals. And it can be done anywhere, by anyone.
Social impact investment allows us to boost these organizations’ growth, and also, to promote economic sustainability in pro-bono organizations that are migrating to hybrid models to have more economic sustainability and by doing this , they could increase their impact. In Creci company, we are convinced that sustainable capitalism plays an important role when it comes to having a better future.
2. Achieve market-rate returns:
Global challenges means global opportunities, so those people who provide nowadays problems solutions will be tomorrow`s financial winners . Since 90’s, impact investment has maintained either on Main Street and Black Rock portfolios a growing component , with established organizations such as the World Economic Forum, G8 and Aspen Institute. All of them, exploring ways to get involved. (we invite you to read our article: Who is investing in social impact?). Data from the Global Impact Investing Network which shows that the majority of the estimated $15 billion impact investment market produces market rate returns.
A study by Morgan Stanley which surveyed over 10,000 equity mutual funds over the past seven years, found that social impact funds on average had lower volatility than comparable non-impact funds. Furthermore, the research has backed up those companies that care about sustainability and enforced proper financial guidelines, in order to give extra benefits for investors.. In addition to that, loans with terms tied to environmental, social and governance targets, have jumped to about $52 billion in volume this year until May , that means, a 292% increase compared with last year, according to Bloomberg data.
3. Meet client demand:
Quoting Greg Petro in his article: “Gen Z Is Emerging As The Sustainability Generation”:
“For more than a year you could sense the collective sigh of the universe as factories shut down, the sky turned blue over Beijing for the first time in decades, and once-clogged highways were emptied as we adapted to home office and home schooling. We’ve learned to do less, to spend less, and to waste less and no cohort has been as profoundly influenced as Gen Z. The pandemic didn’t start the sustainability revolution, but it has put it into hyperdrive, and Gen Z is in the driver’s seat.”
The research has shown that Gen Z and Millennials are most likely to make purchase decisions based on personal, social and environmental principles and values, being a more virtually connected generation, with an easier information access , they use to be much more sensitive to processes which involve products consumed by themselves, and being the first ones on raising red flags due to those companies which have not been fair enough to either social and environmental impact.
But it is important to clarify that consciousness isn’t just related to this generation, even if you’re a Baby Boomer there is a part of you that already knows how important it is to recycle and started doing it.