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

Monday, August 13, 2012

Can you earn a healthy return on your investment and help change the world at the same time?

If you haven’t been paying attention, there are already thousands of entrepreneurs and investors betting that you can, with a multibillion-dollar market to show for it.

The companies and investors in this market aim to create “impact” beyond mere profit – whether that be social or environmental impact. But unlike non-profits, revenues and profits sustain these companies.

These for-profit companies, often called “social enterprises,” are becoming more and more common. Among investors, they’re called “impact investments.”

The impact investment market is difficult to quantify since there is no common criteria to define a social enterprise, and no standardized metrics by which to measure impact.

Regardless of where the criteria and metrics eventually land, a recent study from the Calvert Foundation reports that the potential near-term market for sustainable and responsible investing is $650 billion, and that 72% of financial advisors express interest in offering these investment opportunities to clients.