Are you interested in earning money while making the world a better place? If so, then social impact investing might be perfect for you.
The traditional focus of investing has been to make money for investors. People put their money into the companies that they thought had the best chance of giving positive returns. Imagine, for example, an investor seeing that a major energy company is set to increase in value. The investor buys shares of stock in that company, knowing they will profit and their wealth will grow as the company succeeds and the stock price increases.
With social impact investing, the focus of the investor changes. Instead of merely trying to earn as much money as possible, the person also wants to put money into companies that have a positive social impact. An individual looking to make a socially impactful investment might recognize the earning potential of the energy company mentioned in the example above, but if the company engages in environmentally-unfriendly practices or contributes to climate change, then the person will not make the investment. Instead, they will look for a company that matches their values. They could invest in a sustainable energy company, for example. By choosing to put their money into a company engaging in socially beneficial work, the investor is contributing to the betterment of society rather than its deterioration.
It’s not only environmental issues that inspire social impact investing. Areas like education, agriculture, and healthcare also attract socially-conscious investors. Across the financial world, investors are taking social impact into account as they create their stock portfolios.
In the last decade, social impact investing has grown significantly in scope. Impact investment organizations report massive increases in the total amounts of money invested. Experts estimate that these socially-conscious investments increase around eight percent every year.
This trend has seen a genuine community develop around social impact investing. A number of organizations, including funds and family charitable organizations, have formed to streamline the contributions of individual investors. In the current climate, it is easier than ever to invest in companies that promise social improvement.
Social impact investment is the ultimate win-win. Investors make money while the world becomes a better place. It’s no wonder, then, that the practice has become so popular.