Impact investing: how it works | Credit Suisse

Impact investing

Impact investing is a type of sustainable investing strategy where an investor seeks financial returns alongside a measurable positive impact on society or the environment.  

What is impact-focused investing?

Impact-focused investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. By generating profits from an innovative business model, a company can pay financial returns to investors alongside doing something good for the world.

 

How does impact investing work?

Impact investing works by finding companies that have turned some kind of environmental protection or social progress into a business opportunity. By attracting capital and entrepreneurial talent to companies that create positive change, impact investing approaches can contribute to more sustainable economic development.

 

The type and stage of companies in a portfolio can also influence the extent of the impact. Investors may have the greatest impact when they help fund early-stage companies to get truly innovative ideas off the ground, or by choosing companies and projects in developing countries (where capital is scarce and expensive).

Innovative ideas for impact

img-report-esg-to-sdg-shiftprocess

Our research & insights

 

From ESG to the SDGs

Today, understanding what a company does to make a sustainable impact is extremely important. Our report looks at new ways to evaluate companies that are trying to solve the world’s most pressing problems and why it matters to investors.

Why do impact investing?

Many investors would like to align their investments with their values and to use their wealth to bring about positive change. Impact investing strategies allow an investor to focus on areas where their capital can make a difference. They can also help an investor identify innovative companies that have potential to grow through addressing global sustainability challenges at scale.

Managing impact: Impact Principles

As a signatory of the International Finance Corporation’s (IFC) Operating Principles for Impact Management, we also publish an annual disclosure statement that is independently verified and available on the IFC website.

Related articles