The impact investing movement took the world by storm after the financial crisis - reminding us that capital markets are intended to generate holistic value, not unidimensional profit. Ever since, there has been millions of dollars poured into triple bottom line initiatives that support people, profit and planet. The market size in 2015 was estimated at $60 billion and is expected to reach $1 trillion by 2020.
This article outlines the top areas where impact investing can make a true difference to the world by leveraging the power of finance, including ethical supply chains and digital democratization (think FinTech and EdTech). Topping the list is Climate Financing - using investment capital to secure a greener future and strategically support environmentally conscious companies. In my opinion, it is critical to introduce impact as a third dimension in our investment decisions to strengthen risk-return considerations.
Read on to learn more about how 'impact investing is the new black'.
This is also urgent: Our society faces a politically and economically collapsing Middle East, increasing environmental destruction, and other intensifying threats, and we need to achieve faster progress. In the big scheme of things, impact investing is still a niche activity. But last year, 146 Global Impact Investing Network members reported $60 billion in invested assets in 2015, and 1,380 Principles for Responsible Investment signatories reported assets under management of more than $59 trillion. This suggests growing awareness about responsible investment.