There is a growing concern amongst investors who want to show a degree of responsibility in how they invest, and the idea of impact – where there is a measurable social or environmental benefit alongside a financial performance – addresses this need.
By bringing together the growing community of investors, companies and their advisors leading the field the Impact Investor Club seeks to encourage face-to-face networking to increase awareness and highlight investment opportunities.
- The club meets regularly in London and regional venues throughout the year.
- It is free to attend for approved members, please register for our events here
- Is open to anyone who wants to make the world a better place, and a potential financial return.
- Has been set up to encourage discussion and strengthen understanding of impact investing in the UK and beyond.
- Aims to build awareness through guest speakers, company presentations and round table discussion.
What is Impact Investing?
Impact investing is essentially an investment approach that seeks to create both a possible financial reward and a positive social and/or environmental impact, a dual mandate that differs from the traditional focus on simple risk & reward.
The intended impact must be an integral part of the investment process, considered hand-in-hand with the potential financial returns, which together will highlight the overall success of the investment. This does not mean a possible financial loss; indeed for it to be deemed an Impact Investment, an investor must make back at least the principal invested. A grant from a charitable organisation, even if intended for the same impact, would not be deemed an impact investment.
Importantly, the impact must be quantifiable; if a new micro-finance organisation aims to reduce homelessness in a certain community or a ‘cleantech’ firm creates a new environmental product to offset carbon emission, we must know by how much. It forms the basis of impact measurement and enables a target-driven assessment of the outcomes. Some firms will aim to profit like any other business and generate possible returns, with success leading to a potential financial reward for their investors or the reinvestment of proceeds into growth and further impact; others will be financially viable and sustainable non-profit organisations.
There are a number of areas for investors to consider. Classic sectors include those designed to meet basic human needs, such as in agriculture, water, and housing, as well as those to provide basic services, such as education, health, energy, and financial services. And this is not exclusive to 3rd world requirements: investments are tackling issues in developed and emerging markets alike. The type of investment also offers further choice; one can invest directly in an impact enterprise, through an intermediary such as an impact investment fund, or by removing risk through acting as guarantors for example.
The Impact Investor Club sponsored by the Social Stock Exchange
The Social Stock Exchange (SSX) – the world’s first regulated market for impact businesses – was launched to help companies that deliver a social or environmental impact connect with investors and unlock capital. All member companies must meet a rigorous set of criteria before joining, including the publication of an independently verified Impact Report.