What Is Impact Investing?
These days, people want more than just a good return on their investment.
They want to know that they are making a contribution towards tacking the evils that plague society, whether that be poverty, discrimination, disease, war, or climate change.
Impact investing is an increasingly popular choice for people looking to make a positive difference to their community and their environment.
More and more investors are searching out ways to put their savings to good use. This could mean investing in initiatives that provide access to clean water, affordable housing, medication, education, or clean energy.
Before Impact Investing; The Bad Old Days
Traditionally people made investments for the singular purpose of earning themselves (and their heirs) a good return. It was not uncommon for investors to place their holdings in the hands of whichever fund manager promised the best return. This could easily mean that people ended up unknowlingly sinking their cash into anything from oil to weapons to subprime mortgages.
For many, the financial crisis of 2008 brought home the fact that all too often their money was being invested where it shouldn’t be and not only was this causing economic instability, but it was also ruining millions of lives around the world.
A Brighter Dawn For Investing
Thankfully, things are now changing, and many 21st Century investors are determined to achieve more than simply increasing their bank balance.
In addition to actively avoiding investments which can cause harm to others and to the environment, people now want their investments to achieve something positive. They want to create a legacy that they can be proud of and to feel they are part of a movement that is changing the world for the better. They want their money to do good.
They want to join the movement towards impact investing.
Opening Up Investing To A Wider Audience
In addition to a change in the type of investments people are making, there has also been a big shift in the kind of people that are investing.
No longer is the realm of investment confined to ‘High Net-Worth Individuals’ and fund-managers from the corridors of Canary Wharf. Many impact investment opportunities have a relatively low threshold of minimum investment (at BHESCo our minimum investment amount is £250). This makes it much more achievable for everyone to become shareholders and investors.
Furthermore, the unstoppable rise of the internet has made information about impact investing much more widely available. People can do their own research just by typing a phrase into Google or by asking friends for recommendations on Facebook or Twitter. This also helps to foster the feeling of being part of a community that’s tired of the old regime, and is coming together to create real positive change in the world.
Brighton and Hove: A Hub For Impact Investing
Brighton and Hove is well known for its progressive and forward thinking environment, which has helped to cultivate an abundance of innovative social enterprises for such a small city.
The local ethical investor is spoilt for choice with opportunities to invest in businesses which are creating a better world. Whether that’s investing in the UK’s first solar bus fleet or the world’s first football team to pay women the same as men, there’s plenty of scope locally to support something groundbreaking.
No doubt many social entrepeneurs feel convinced that Brighton’s liberal and eco friendly ethos is the ideal place to establish their fledgling business. As well as being home to the UK’s only Green MP, Brighton has made a name for itself as a leading city in the digital and tech sector.
Making A Positive Impact Together
Speaking to some of our BHESCo shareholders it is clear that these are the types of motivations that drew so many investors to our co-operative.
For some, it was the promise of supporting the growth of renewable energy and energy efficiency in the UK, while others wanted to support work that tackled fuel poverty in Brighton and Hove, a service which literally saves lives each winter.
One thing is for certain – people are coming together around the world to use their money collectively to champion causes that they believe in. The days of the greedy stock-broker are diminishing. It’s time for a new type of investor to take the lead; one with a clear purpose, consciousness about their role on the planet and conviction that they will change the world with the resources they have.
Gandhi’s famous challenge for people to “be the change you want to see in the world” has never been more compelling.