Impact investing is a hot topic, but Version 2.0 would improve the odds.
By Dr. Matthew Kiernan
“Impact Investing” is generating an enormous amount of “buzz” these days – even if it is talked about much more than it is practiced. It has become particularly popular among foundations, endowments and high net worth individual investors. While the precise meaning of the term is still being defined and debated, in essence, impact investing is a style that explicitly pursues social and environmental objectives as well as purely financial ones.
In many cases investors are willing to sacrifice some of the latter to achieve the former. Typically, impact investing occurs in the emerging markets, in private transactions and at a small scale: to date the average investment has been in the USD 1 million range. Typical projects might include the purchase and distribution of cleaner-burner cooking stoves or solar-powered lamps, to rural villages in Africa, Asia or Latin America. All very good stuff, but…