Defining Impact Investing

Impact investing is a methodology that seeks to generate financial returns while also creating a positive and measurable social or environmental impact. Impact investments need to strictly comply to such criteria.

Impact investments can be made in both emerging and developed markets and target a range of returns, depending on risk profile, geography and asset class.

The ever-growing global impact community of private and institutional investors provides capital to address the world’s most pressing challenges in line with the United Nations Sustainable Development Goals (UN SDGs) in sectors such as renewable energy, sustainable food and agriculture, conservation and biodiversity, access to finance, access to energy, affordable housing, healthcare and education.

Impact investing is not philanthropy as it aims at generating positive, risk-adjusted financial returns. It should also not be confused with corporate responsibility (CR), or SRI and ESG, as those aim more at reducing the negative environmental impact of an activity or investment rather than generating positive impact.

The HIIN was the first to define Impact Investing in Greece publicly as “ΕΠΚΑ Επενδύσεις Κοινωνικού και Περιβαλλοντικού Αποτυπώματος” in Mr. Kostis Tselenis interview in with Mr. Dimitris Mallas “How Greece can enter the map of sustainable investments” (EL: “Πώς η Ελλάδα μπορεί να μπεί στο χάρτη των βιώσιμων επενδύσεων”) in July 2020. We specifically underline the need to stand against “green washing” and “impact washing”, two unfortunate trends of companies and investors using the impact idea for activities and investments that do not comply with strict impact criteria as explained above.

In summary, Impact Investing:

  • Is a methodology that can apply to any industry, asset class, geography
  • Does not compete / relate to philanthropy and development aid (but works synergistically with them)
  • Is the key to address the UN global challenges ahead & close the financing gap in time
  • Is here to stay, is growing fast and has a tremendous upside potential
  • Experiences high demand especially from families and HNWI
  • Is developing to a core wealth management optimization tool
  • Can prove to be a unique business opportunity for wealth/asset managers and banks
  • Can diversify portfolios with innovative, uncorrelated investments
  • Can successfully address family succession issues and inspire the next generation
  • Faces challenges, needs careful approach, and the help of the right experts

We align our definition of impact investing with the definition provided by the Global Impact Investing Network (GIIN).

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