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Why Social Impact Investing?

Recent developments in investing show that more and more investors start to focus on investments that are compatible with their social and ethical values. A means to achieve this is provided by the strategy of Social Impact Investing. At baMa we support this style of investing to generate a positive social and environmental impact while still generating the desired financial returns. One market analysis published by the GIIN estimated that by the end of 2019 more than 1720 organizations had managed assets worth of $715 billion within the impact investing market.

According to an article from the Investopedia, Social Impact Investing is often interchangeably used with ESG or Socially Responsible Investing but there are some key differences. The ESG standards refer to a company’s environmental, social and governance practice while SRI focuses on investments that align with one’s social and ethical values. The strategy of Social Impact Investing takes this one step further and sets the social impact of an investment as the top priority to support businesses and organizations in creating positive changes in society.

The impact investment market provides capital to sectors such as: Renewable energy, conservation, sustainable agriculture as well as basic services such as housing, health, and education and diverse entrepreneurs as we target at baMa. This strategy of investing actively challenges the view that social and environmental problems should be addressed through philanthropic donations and that market investments are only focused on financial returns. The impact investing market offers the opportunity for investors to promote environmental and social solutions through investments while earning financial returns. Want to know what motivates an investor to invest in this market?

According to an article of the GIIN, government investors and development finance institutions have the opportunity to provide proof of financial viability to private-sector investors, while targeting environmental and social objectives. Family and institutional foundations can benefit from significantly large assets to promote environmental and social objectives while maintaining or increasing their profits. Banks, financial advisors, pension funds and wealth managers can offer investment opportunities to both institutional and individual clients that have an interest in environmental or social causes.

We are more conscious and concerned about the needs of society and our environment. We can all, to a greater or lesser extent contribute to social change. Whether you are an investor and invest with social impact or contributing with the power of purchasing. Every time we make the decision to purchase a product or service, we seek to generate a positive impact or at least reduce a negative one. What about you? Do you want to join those who provide benefits and positive impacts to our planet and society?

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