Impact investing is the act of gaining a financial return on investment and also producing benefit for society. Investors can do that by selecting to invest in businesses that address the issues such as climate change, poverty reduction, and inequality which will pay dividends.
Impact investments can focus on different types of positive outcomes:
Social Impact: investments aimed at improving education, health, or job opportunities.
Environmental Impact: investments directed towards the support of projects such as renewable energy or conservation.
Economic Development: investments made for small businesses or given to microloans in underserved communities would be the examples of this type.