What is impact investing?
Impact investments are investments made with the intention of generating measurable social and environmental outcomes, in addition to a financial return.
By intentionally targeting specific social objectives along with a financial return, impact investing holds enormous potential for unlocking private capital to find solutions to society’s most pressing challenges.
In Australia and internationally, impact investment is developing as a key part of an expanding toolbox for achieving positive change. Impact investing is already having a positive impact across sectors ranging from local jobs to health, education, energy, housing and agriculture. While the market is still in development, its global potential is estimated at between US$600 billion and US$1 trillion within a decade.
Why impact investing?
Impact investing is about improving the world we live in and delivering better outcomes for our most difficult and pressing issues. Recognising that all our societal needs can’t be met by governments and philanthropy alone, impact investing offers a different way to achieve positive outcomes with a focus more on innovation and prevention.
Impact investing benefits communities, social purpose organisations, entrepreneurs, philanthropy, private sector and governments. It combines finance with a clear focus on better societal outcomes including breaking ongoing cycles of poverty and dependence. Utilised well, impact investment can increase the effectiveness of government and donor initiatives and provide incentives for new private investment.