You may have heard the term impact investing before, but what exactly does it mean and how does it work? Impact investing is a way to get investors involved in socially responsible companies and organizations. Impact investors seek out and invest in companies have corporate social responsibility. Corporate social responsibility is a way for companies to give back to their communities and the world in general through initiatives and activities. Some examples if corporate social responsibility include volunteering to take care of the environment, helping build sustainable housing and energy resources, investing in social programs in and around their local community. Corporate social responsibility (CSR) can be a variety of different things. Impact investing helps fund companies that have a profound sense of CSR.
Traditional investor and investment firms may be put off by the idea of investing in companies dedicated to improving social and environmental problems. It can be difficult to determine the scale in which these companies gain returns on their work. Many impact investors invest just to help keep socially conscious companies open and active. Over the years, impact investing has become more and more popular with investors of all types. Generally, impact investing comes from organizations and people like religious institutions, angel investors, private foundations, or even family-owned businesses of offices. Other investors include institutional investors or, organizations that invest on behalf of its members that belong to it.
The Impact of Impact Investing
The ultimate goal of impact investing is to affect the community and society at large positively. Millennials are a growing force in all areas of society. Millennials are more aware of significant problems going on in their society and are known to be more interactive with causes and organizations that help solve societal problems. Companies around the world are beginning to be aware of the impact of their businesses and have created initiatives to help curb the negative impact on the societies they work for. In the near future, it is predicted that impact investing will grow as millennials become more financially stable and more companies adopt a more aggressive sense of corporate social responsibility. Everyone from the local community to societies across the world can benefit from more impact investors and more companies taking responsibility for themselves and the people around them.