Historically, the forces of the market were kept in check and encouraged to “do good” by governmental regulation (such as pollution controls) and incentives (such as tax breaks) built around encouraging philanthropy. Under this old model, the assumption was that business and market-based economics are inherently damaging to the overall environment and society and need to be reined in or controlled in order to avoid runaway abuse and social damage in the name of profit-seeking.
Under the newer model, the social conscience of people collectively guides and informs business practices. Impact investing “does good” because there's money to be made while doing it. Positive social outcomes are an important part of that investment because they feed and grow the marketplace to offer better and more wealthy customers, a more educated and productive labor force and increased economic opportunity for all.
Impact Investing seeks to minimize the social and environmental consequences of business activity without diminishing market-based production activities and profit realization. Advances in clean energy, efficient production, information distribution, and globalization have made Impact Investing practical, profitable and realistic on all business scales.
read moreImpact investing can produce meaningful results on a global scale even through very small steps towards socially responsible business. Here are a few ways small investments produce big results...
Traditional venture capital funding provides startup money to companies with good ideas, a strong potential market and a positive outlook for return on investment (ROI). Profitability on a scale to return the equity investment quickly is of paramount importance to all venture capital deals.
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Microcredit, or microloans, are the extension of very small loans to borrowers who lack collateral or a verifiable credit history. They are generally, but not always, used to support entrepreneurship and alleviate poverty in the developing world.
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Clean drinking water is a fundamental need around the world. The technology to provide it is readily available, but a lack of basic sanitation still kills more people every year than all forms of violence.
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Leveraging the good work of a social impact program requires a deft and skilled marketing touch. Sustainable Brands writes about a study showing that 50% of consumers are willing to pay more for socially responsible products, particularly among younger consumers.
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