Experts say that impact investing offers competitive portfolio performance. Sustainable investment funds with assets of more than $260 billion have tripled over the past decade.
Impact investing was first coined in 2007. As an investment strategy that focuses on corporate social responsibility, it’s considered an extension of philanthropy.
Investors will find impact investments across asset classes and sectors, including healthcare, education, agriculture, technology, energy, microfinance, housing, etc.
- Stocks - Exchange-Traded Funds (ETFs) - Mutual funds - Venture Investments - Entrepreneurship
Impact investors may focus on the part of the score as they may be interested in a specific impact the company makes in a particular area.
Some companies hire ESG rating agencies to analyze their performance. These agencies report corporate sustainability measures, compensation details, board structure, annual reports, and environmental criteria.