Impact Investments are investments made in social enterprises or investment funds that target social enterprises with the intention of generating positive social and/or environmental impact alongside a financial return. The term “double bottom line” is also sometimes used to describe the same concept. Some definitions include “measurable impact” to emphasize that social and environmental returns are often measured and reported to investors.
Depending on the strategic goals of the investor, such investments can be made in frontier, emerging or developed markets, and can target a range of financial returns from commercial (“market”) returns to concessional (“below-market”) returns. As opposed to SRI and ESG investing, which rely on exclusionary practices to screen out harmful investments, Impact Investing aims to bridge the altruistic principles of philanthropy with traditional investing.