Impact Investing

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Impact investing refers to the act of making investments into companies, organizations and funds with the intent to create measurable social and environmental impact alongside financial returns. It offers new possibilities to tackle problems in both developed and developing country contexts and is an important tool to add to the toolkit of both investors and philanthropists. Impact investing is a dynamic and growing field where new innovations are enabling more capital to flow to ventures creating impact in an entrepreneurial and sustainable way.

Our mission is to support the growth of this field through research and collaborative initiatives engaging investors, funders, students, entrepreneurs, academics and policymakers.

   

Demystifying Impact Investing

Demystifying Impact InvestingImpact investing has emerged over the last decade as one of the most talked about new strategies for tackling social and environmental problems. The emergence of the concept has been accompanied by a great deal of hype and a confusing array of competing definitions of impact investing. There have also been many claims about what kind of financial return can be achieved while also solving social and environmental problems. Some analyses of the impact investing sector suggest that it currently accounts for $9bn annually of investment capital flowing through channels that are distinct from the mainstream capital markets from a range of investors including philanthropic foundations, high net worth individuals and traditional investors seeking to create impact alongside financial return. Others have questioned whether the approach is indeed new, whether projected financial returns will really meet the expectations of investors and whether impact investing truly refers to new sources of capital or is only a new term for traditional investments that happen to have positive social or environmental impact as a by-product.

Demystifying impact investing examines the global impact investment industry and focused particularly on the private equity and venture capital asset class within impact investing. We broke down some of the myths, and analyzed what the opportunities are. We then focused specifically on the context relevant to Canadian investors. This paper provides an overview of impact investing and demystifies this sector for individuals and family offices exploring the space.