Impact Investing 101: Helping the Planet & Earning a Return

By the team at Annuity.org

With the rise of more sustainable businesses and organizations has come an increase in the number of impact investments available. Impact investments are an excellent way to make a difference in society and protect the environment, while still earning a financial return. It’s the best of both worlds, right?  

How Does Impact Investing Help the Planet? 

Impact investments are a type of investment you can make in a company or organization that focuses on sustainability or has ethical practices in place. These organizations can be solely focused on doing good for the planet, or they can have different overall goals, while still putting in place environmentally friendly policies. 

Return on Investment

The good news about your return on investment for this type of opportunity is that they typically perform as financially well as other types of investments. This isn’t always the case, but you can expect a solid return if you’ve done your research and have an idea of the organization’s financial health. 

However, for those interested in sustainability, the most important benefit of impact investments is that there is an impact return. You’ll still need to do your research and make sure the organization has a solid history of leaving an impact, but generally speaking, you can expect that your investment will leave the planet a better place. 

How to Spot a Good Impact Investment

Perhaps the most valuable thing you can know how to do as an investor is determining what is a good investment opportunity. When focusing on impact investments particularly, there are a few things you can look for that will help you make a good investment decision. 

  • Environmental goals: What is this company or organization doing to help the planet? 
  • Social responsibility: Are there ethical business practices in place? 
  • Governance factors: How transparent are they to shareholders and other stakeholders?

Deciding on what impact investment is right for you can take some time and research, but it can be very rewarding. To learn more about impact investing and how to get started, look through the visual from Annuity.org below.