What is Impact Investing?
According to the Global Impact Investing Network, Impact Investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return."
For the purpose of the article, I consider "investment" not just related to finances - investments can be made with your time, actions, choices, values, and voice. Something that each and every one of us have to be able to invest in projects.
For me, Impact Investing is directly related to the Triple Bottom Line goals that I help my clients achieve. For decades in business, there has been sole focus on one bottom line, the last line on a financial report that indicates net profit or the monetary income a business has made. What gets ignored and unaccounted for is the profit (or loss) that occurs on the social and environmental aspects surrounding the business operations and outcomes. If we encapsulate the full picture, we get a much deeper sense of the results of our organizational activities - the 3 P's, aka People, Planet and Profit. This allows us to know performance in a more holistic and all-encompassing measure, the Triple Bottom Line.
Below is a great infographic from CSR Ambassadors that represents the 3 P's. When designing your organization's goals and activities, it is really helpful to think about how to balance the different variables associated with critical areas, or People, Planet, and Profit. If you do this and have measurable outcomes for each area, you can rest assured that you are truly investing in impact.
What does the White House, Stanford and one of the world's largest investment banks have to say about Impact Investment?
Big financial movers and shakers around the global are giving attention to Impact Investing - changing a traditional investing field into one that has more depth and just maximizing monetary profit. This video peaked my interest because too often organizations with a social or environmental mission are viewed as a less serious business and get an "Aww, that's cute" kind of response. There is a belief that businesses that operate with a social and/or environmental mission do not perform as well as those that do not, that they are small players in the field. Despite this belief, the Impact movement is not to be underestimated and the professionals on the panel at the Stanford School of Business talk straight up about the uprising of the Impact Investment movement and the real outcomes being achieved on a big scale. Check out the video if you want to learn more!
Author: Melissa Loh
Mel is a People-Planet-Profit driven business coach, consultant and project manager helping to evolve the future of work and redefine business as usual. Access more of her writing and free resources by subscribing to her newsletter.
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