NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Francois Botha

In theory, impact investments are investments made into organizations, companies, or funds to contribute to measurable positive social or environmental change while also yielding a return. Still, many impact-curious family office investors question whether achieving a measurable positive impact goes hand-in-hand with returns or if they’ll have to sacrifice these earnings for the greater good.

The answer is complex and multi-faceted. According to impact investment researcher and advisor Rachael Browning, “It is stuck in both the old way of perceiving ‘returns’ and the hope for doing things better in future, in a world that desperately needs ambitious impact-driven capital.” Drawing a conclusion thus requires an in-depth understanding of the various facets of impact investment.

Photo courtesy of Sudipto Sarkar.