Queconomics – Impact investment refers to investments whose vision and mission are not only to prioritize returns on a profit basis but also to balance returns in the form of social and environmental impacts.
This kind of investment is not only aimed at institutional investors, but also individuals who may be more interested in improving the quality of life, the environment, and other positive things.
This principle will increase the transparency, credibility, and discipline of impact investing. Future investments will also be managed according to this principle.
This principle provides clear market standards for what is meant by impact investing and addresses concerns about impact-washing or not achieving the intended impact.
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Impact Investment Has Been Introduced since 2000s
The concept of impact investing has been introduced since the early 2000s, providing a return from the financial side as well as having a measurable and measurable social and environmental impact as the two main requirements of impact investing.
The social impacts provided can vary, ranging from job creation, improving the quality of health, education, and so on.
This type of investment can usually be channelled through various channels, whether it can be done by making direct investments to the targeted companies/foundations/NGOs, as well as through venture capital or social impact funds.
This investment is not only aimed at institutional investors, but also individuals who may be more interested in improving the quality of life, the environment, and other positive things.
In addition, it also has a fundamental difference with Corporate Social Responsibility (CSR). CSR is usually carried out by companies voluntarily and independently, not related to the return on this investment.
Difference between Impact Investing and CSR
The duration of CSR and impact investment is also different because CSR is carried out in certain periods and it is expected to be prolonged or sustainable. The objectives of this investment are often linked to the SDGs (Sustainable Development Goals).
The SDGs are aspirations carried out by the United Nations related to 17 aspects that countries can try to have a more positive impact. These aspects include the environment, gender equality, poverty, education, health, and so on.
By holding various activities based on social responsibility, at the same time the company is also attracting “sympathy” from investors to invest capital/shares in the company. Indirectly, this will increase their profit.
Collaboration is needed between institutions, foundations, companies, and also the government related to research that is critical of impact investment so that the funding scheme is also clear in regulations.