The Rise of Impact Investing: How to Invest for Good

Impact investing has been on the rise in recent years, as more investors are looking to put their money into companies that are making a positive social and environmental impact, in addition to generating financial returns. According to the Global Impact Investing Network (GIIN), the impact investing market grew from $228 billion in assets under management in 2017 to $715 billion in 2020.

But what exactly is impact investing, and how can you get started? Impact investing is the practice of investing in companies, organizations, and funds that aim to generate a positive social and/or environmental impact, while also generating a financial return. This can include investments in areas such as renewable energy, sustainable agriculture, affordable housing, and healthcare.

Here are some tips for getting started with impact investing:

1. Identify your values and goals: Before you start investing, it’s important to identify your values and goals. What issues are you passionate about? Do you want to focus on environmental sustainability, social justice, or both? Once you have a clear sense of your values and goals, you can start to look for investments that align with them.
2. Do your research: As with any investment, it’s important to do your research before investing in impact funds or companies. Look for funds and companies that have a clear mission and track record of success. You can also check out impact investing platforms and resources, such as the GIIN or ImpactAssets, which offer tools and resources for impact investors.
3. Consider working with a financial advisor: If you’re new to impact investing, consider working with a financial advisor who has experience in this area. They can help you identify investments that align with your values and goals, and can provide guidance on how to build a diversified impact portfolio.
4. Don’t forget about financial returns: While the social and environmental impact of your investments is important, it’s also important to consider financial returns. Look for investments that offer competitive returns, and don’t assume that impact investing means sacrificing financial returns.

Overall, impact investing can be a powerful way to align your investments with your values and contribute to positive social and environmental change. By doing your research, identifying your values and goals, and working with a financial advisor if needed, you can start building a diversified impact portfolio that generates both financial and social returns.