The term “Divesting” has been gaining popularity around the environmental movement for years and, recently, has been expanding into sectors throughout the industrial and economic spectrum. The increased attention on corporate social responsibility and environmental sustainability has driven many companies and institutions around the globe to withdraw their investments from fossil fuel, oil and mining companies.
This is great news. More people are coming to the green side. With more people advocating for social justice, the demand on the corporate world to respond increases.
But once you divest, where do you go?
Responsible investing means assessing your investment portfolio to ensure that your are not invested in companies that go against your values, beliefs and ethics.
Impact investing means you invest in companies and social enterprises that develop and provide solutions to social challenges, such as climate change and poverty.
Breaking into the impact investment market is not as traditional as walking into a bank and opening a TFSA account but it doesn’t have to be incredibly difficult. As the movement grows, more and more opportunities are being created and myths are being busted.
Just a few examples of impact investment marketplaces are listed below:
As consumers, investors and voters we have the collective power to make great change happen but often, we are unaware of the social implications of exclusively informing our decisions with dollar signs. When it comes to investing, many people feel safer investing their money in mainstream funds with familiar financial institutions. In fact, impact investing has reached mainstream and many financial institutions have already diversified their portfolios to contain a percentage of investment in companies with a large dual bottom line: profit and social impact.
From The Stanford Social Innovation Review:
“Who has done what in this space, and what do we know about performance? In a nutshell, this is why the Case Foundation, working with partners across a broad spectrum of the impact investing ecosystem, built an Impact Investing Network Map—a tool we hope will help answer these questions over the coming years.” Jean Case, Data: The Next Frontier for Impact Investing.
Former Mayor of Washington D.C., Anthony Williams, writes that investment directed toward local communities could help struggling cities turn their economies around:
“A survey of all foundations shows that a vast majority are at least interested in doing more social impact investing. Add up all the foundation assets in the United States—nearly $1 trillion—and we’re talking serious money for mission-related investing.” A Comeback Investment in Cities, from the Atlantic City Lab.
The recent announcement by the Government of Canada that they will invest nearly $8 million in three Canadian, clean tech companies sends a strong message:
“Our government’s investments in clean technology reflect our commitment to protecting the planet,” said David Lametti, parliamentary secretary to the minister of innovation, science, and economic development Navdeep Bains. “But they also point to a clear and strategic direction for economic development through innovation. That’s because innovations in clean tech will lead to products and services that have an impact on all sectors of the economy.” From BetaKit.com, the Canadian Start-up News and Tech Innovation website.
From Stanford to Washington and back to our Canadian soil, impact investments are trending because who doesn’t want to contribute in the growth healthier societies while also making money!?