Impact investing offers people the chance to contribute to social and environmental change. In addition to investing in impact industries themselves, one can also work in them.

What is impact investing?

This type of investing consists of making investments to generate positive, measurable impact. One group of impact investments is called ESG or environmental, social, governance investing. These investments concentrate on three important sets of issues.

The “environmental” component is a company's record as a steward of the natural environment. The “social” looks at how a company manages its relationships with its employees, suppliers, customers, and the community. Finally, “governance” refers to a company's leadership, including its pay policies. Governance also takes into account audit results, internal controls, and shareholder rights programs. While ESG is a subset of impact investing, it does differ from it in that ESG companies see their efforts more as part of making better profits, rather than as primary priorities in and of themselves.

On the other hand, sustainable investing, also called socially responsible investing, emphasizes the ESG factors that relate to sustainable agriculture, renewable energy, and similar issues.

 

Impact investing throughout the years

Although investing based on beliefs has been around for thousands of years, the recent movement comes primarily out of the 1960s and 1970s, where investors consciously avoided war industries because of the Vietnam War and divested from South Africa due to apartheid. Over the next few decades, and especially in this century, large charitable foundations have created and applied formal programs and standards for impact investing. These programs have had a significant influence on the market. For instance, public companies began to track and report on impact measurables. Today, nearly all of the 250 largest companies in the world track and report on these issues.

 

Current trends for 2021 in impact investment

This industry is growing and welcoming new members. Important recent trends include:

1.        More access to better information for new investors.

2.        Growing job opportunities for more financial professionals.

3.        Growth in impact-investing-based industries, providing opportunities to make investments.

4.        Increase in investor interest.

5.        Measuring impact as the new normal.

 

Impact industries in 2021

Many of the groups that focus on impact investing also look at what working for the companies underlying their investments can be like. Impact industry jobs can include those in:

1.        The non-profit sector.

2.        Direct work in impact industries.

3.        Investing.

4.        Healthcare.

5.        Microfinance.

 

A number of organizations focusing on impact investing, such as Net Impact, even offer job boards to help with finding work in this sector.

 

Non-profit

There are, of course, lots of non-profit sector opportunities for impact investment jobs. These can include working for organizations like Net Impact and GIIN. Educational opportunities are also numerous. Net Impact alone offers three to four of its educational events monthly, while GIIN offers training to investors who want to understand what impact investing is.

These groups need individuals to write and teach these programs. Jobs at these non-profits can also range from research to financial analysis, from marketing to teaching, as well as traditional management jobs. Non-profit cash compensation or salaries are usually not as high as those at for-profit businesses, but when benefits are added in, the total package can beeven higher than in a for-profit. That makes this sector an important place to "do well by doing good."

 

Research and direct work

The industries in which impact investors put their money can also offer meaningful job opportunities. Architects, builders, and other housing pros, for instance, can work in affordable housing. Scientists can find jobs in sustainable agriculture and renewable energy. In addition, jobs in biodiversity and climate science are particularly relevant.

 

Investment professionals investing for impact

Aside from customers making impact investments, there are lots of financial professionals who want to help them do it. There are, for example, registered investment advisors whose practices concentrate on impact investing. There are also mutual and exchange-traded funds that focus on this type of investing. Hedge funds are a growing market sector and can feature significantly higher compensation for those who work for them too.

Professional jobs in financial services are well paid, with average salaries ranging from the low- to mid-six figures. There are even new market indexes, similar to those like the S&P 500, which track the impact investment area of the financial markets.

 

Healthcare

Healthcare is another important sector of impact industries and offers a wide range of job opportunities. Indeed, international healthcare features some of the most exciting impact investing job opportunities. In countries where government funding for infrastructure may be limited, the impact of western healthcare can be literally world-changing. Not only healthcare professionals but also medical researchers can find many opportunities in this area.

 

Microfinance

According to FINCA International, microfinance consists of providing certain financial services to those not well served by traditional banks. The most well-known service is small loans, particularly in the developing world, to people like women forming small start-up businesses. A search on LinkedIn, as of this writing, for microfinance jobs leads to 146 listings. Certainly, microfinance is an opportunity to make a real impact in real lives.

 

Doing good

Working in impact industries and businesses allows people who want more than just a paycheck to contribute to impact goals by doing their jobs. For people who want to help change the world, any job in any impact investment industry can be the best job. Learn more about how you can get involved with Net Impact to start changing the world this way.