Impact investing

Impact investing investments are investments made with the intention of generating a positive, measurable social or environmental impact with a financial return.

Each investment contributes to a short- and long-term positive or negative social and environmental impact. All investors shape these effects through investment decisions. Investing based on impact investing is an approach used to use the strength of your investment capital to actively contribute to the improvement of people’s life and health or the condition of the environment.

Impact investing is a relatively new term that is used to describe investments that are made in many asset classes, sectors and regions. According to research conducted by the Global Impact Investor Network (GIIN), the value of impact investment assets in 2021 amounted to USD 1,2 trillion and grows by several dozen percent year on year.

Investments in the impact investing area are characterized by:

■ INTENTIONALITY: Impact Investments deliberately contribute to social and environmental solutions. This distinguishes them from other strategies such as ESG investing or socially responsible investing (SRI). With this in mind, the impact generated by a startup cannot be alongside or alongside the implementation of the core business. It must be its immanent element.

■ FINANCIAL RETURN: The funds in the impact investing area are still venture capital funds – the investments are aimed at obtaining a financial return on capital, which can range from a market rate below market rate to a risk-adjusted market rate. This distinguishes them from philanthropy or non-profit activities.

■ IMPACT MEASUREMENT: A characteristic feature of impact investments is the commitment of the investor and the company to measure and report the social and environmental results of the investment. As in the case of financial indicators, measurable values ​​are determined that are planned to be achieved, in the case of an impact – we are looking together for the best and best reflecting indicators.

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