Center for Business Sustainability

Impact investing primarily refers to investing in other companies, organizations, or funds through the capital markets with the goal of achieving measurable positive social or environmental impacts, in addition to traditional financial returns. The core value of impact investing is to use capital investments to realize the beliefs and values of investors while working towards their social and environmental objectives. Institutional investors, particularly those in Europe and the United States, have been pioneers and major advocates of impact investing.

There are several key elements of impact investing:

Investor Recognition of Purpose: Investors are conscious of the purpose of their investments, including a deliberate intention to achieve social and environmental value.

Financial Returns with a Minimum Threshold: There remains a certain minimum threshold requirement for financial returns, even as the focus extends beyond financial gains.

Clear Measurement and Quantification: Impact investing requires the clear measurement and quantification of social and environmental value. This information should be communicated to stakeholders to achieve transparency, and related actions should be accountable.

In summary, impact investing is a comprehensive investment approach that combines financial returns with the pursuit of long-term sustainable value in terms of social and environmental impact. This investment strategy is typically supported by investors who have a sense of social and environmental mission and has gained increasing attention and development in recent years, especially with institutional investors in Europe and the United States taking a lead role.