Positive impact investing and finance is a very promising new tool and process to turn investments into a tool to reach social and environmental aims. The basic idea is to create both, a financial and a social/environmental added value and to increase the options and choices of investors at the same time.
Normally banks like long standing track records and proven transaction blue prints. However, we are not living in normal times right now. A lot of new challenges and megatrends we have to deal with let alone the financial crisis. Therefore Impact investing has already arouse interest in the industry. It started as a maverick activity, with independent-minded early investors, delivering innovative approaches to finance social goods. With the increase of interest in impact investing by governments, now the former pioneers are in a prime position to put capital behind solutions to some global challenges. The financial industry can take up the ball to address, for instance, the problem of a lack of education, the climate change, health care, demographic change, ecosystems services and nutrition.
At the same time, the practice of impact investing tackles the problem of a lack of trust and the accusation of unethical behaviour head-on. Impact investing has the potential to set goals which shareholders, stakeholders, political development aid and society have in common. If this way of thinking evolves into a part of the DNA of the investment industry, it can create commitment over compliance.