5 of the Best Ways to Start Impact Investing

World-wide threats from global warming, the COVID pandemic, and social inequality call for change. However, the conversation extends beyond recycling, clean air, and electric cars.

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.

What is Impact Investing?

However, its desire to promote the welfare of others doesn’t negate the return on investment. Impact companies are not necessarily non-profit organizations.

Investors will find impact investments across asset classes and sectors, including healthcare, education, agriculture, technology, energy, microfinance, housing, etc.

Types of Impact Investments

- Stocks - Exchange-Traded Funds (ETFs) - Mutual funds - Venture Investments - Entrepreneurship

Types of investments that investors may consider:

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.

How Are Impact Investments Measures?

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.

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