Goals are important matters to consider when picking investments. An increasing number of investors are looking beyond personal goals and investing with societal and environmental objectives in mind. This new trend is called impact investing.
What is impact investing?
This type of investing is based on the idea of using capital to make a social or environmental impact, in addition to making financial returns.
Top impact investing trends for 2021
With an estimated $715 billion in assets under management, impact investing is helping communities around the globe.
Here are the main trends shaping this type of investing for 2021:
- More impact investors are interested in projects that support Black, Indigenous, and People of Color (BIPOC), women and girls, and the LGBTQ+ community.
- Awareness of climate change continues to grow. More funds focus on eco-friendly investments and environmental impact to address challenges like habitat destruction, unsustainable agriculture practices, and invasive species.
- Technology can unlock significant value for underserved communities. Investors are recognizing this potential and are prioritizing projects that leverage tech to create sustainable growth.
- As interest in impact investment grows, we’re seeing a wider range of investors in this space. It’s a diverse field where one can find pension funds, family offices, non-profits, and government investors.
- There are new ways of measuring the impact of investments beyond financial returns with data and analytics. Impact investors are using these tools to identify the projects that create the most value, from social and environmental points of view.
Five leaders in impact investing
The following organizations are making a difference through impact investments that create value for everyone involved.
1. Vital Capital Fund
The Vital Capital Fund helps isolated communities in Sub-Saharan Africa. This private equity fund builds houses and supports agriculture. Other projects improve access to healthcare and education.
2. Human Ventures
Human Ventures is a platform that supports business creation. Access to entrepreneurship can be challenging. Human Ventures addresses this issue by providing access to a network of partners and impact investors. Between co-built companies and external investments, 12-20 companies are created each year.
3. The Reinvestment Fund
The Reinvestment Fund focuses on urban and isolated rural communities. With the help of local partnerships, this organization has built over 23,000 homes, created more than 35,000 jobs, and facilitated 1.9 million annual patient visits in areas where access to healthcare can be a challenge.
4. Global Partnerships
Global Partnerships helps people living in poverty. This impact investor works in partnership with 82 social enterprise partners in 26 countries. The goal is to create opportunities and help people get out of poverty. Projects include financing home improvement, developing clean energy, and improving access to education and healthcare.
5. Farmland LP
Farmland LP purchases commercial farmland to transform it with organic and sustainable practices. With 15,000 acres under management, this organization has an environmental impact at a local level by reducing chemical use and selling organic crops.
A career in impact investing is an ideal choice if you’re passionate about finance and would like a job that aligns with your personal values. Learn more about impact investing with Net Impact’s career resources.