Not only does impact investing allow investors to do good, but when well-executed, it can help and enhance their ability to meet investment objectives, says Hill Gaston, senior investment consultant within Mercer’s sustainable investment team. In recent years, he has seen impact investment move up the agenda, driven by investors’ desire to generate positive social and environmental outcomes alongside investment returns. “Impact investing seeks to answer two questions: what financial impact will this investment have on my portfolio and what positive impact will this investment have on people and planet?”, he says. For example, microfinance, or the provision of small loans to those that aren’t served by the traditional banking sector, is an established area within impact investing. It benefits people and communities across the world as well as investors, by not only generating returns, but also helping increase financial inclusion. In Bangladesh 2.5 million people have been lifted out of poverty through microfinance over the past 20 years.
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