Finance USA

Jan 21 2020

Companies to invest in 2019




Companies to invest in 2019-Companies to invest in 2019
Companies to invest in 2019-Impacting investing is investing that aims to generate specific beneficial social or environmental effects in addition to financial gains.



Impact Investing

What Is Impact Investing?

Impact investing refers to an investment strategy that is meant to generate not only financial return, but also a social and environmental impact. The point of impact investing is to use money and investment capital for good reasons. The strategy actively seeks to make a positive impact by investing, for example, in nonprofits that benefit the community or in clean technology enterprises. Impact investing attracts individuals along with institutional investors including hedge funds, private foundations, banks, pension funds, and other fund managers.

What is Impact Investing?

How Impact Investing Works

The term impact investing was first coined in 2007, but the practice developed years earlier. The basic goal of impact investing is to help reduce the negative effects of business activity on the social environment. That’s why impact investing may sometimes be considered an extension of philanthropy. Investors who use impact investing as a strategy consider a company’s commitment to corporate social responsibility (CSR), or the sense of duty to positively serve society as a whole, before they become involved with that company. This impact varies based on the industry and the specific company within that industry, but some common examples include giving back to the community by helping the less fortunate or investing in sustainable energy practices. A common example of impact investing includes giving back to the community by helping the less fortunate. Impact investing includes many different forms of capital and investment vehicles. The bulk of impact investing is done by institutional investors, but a range of socially conscious financial service companies, web-based investment platforms, and investor networks now offer individuals an opportunity to participate in it. One major venue is microfinance loans, which provide small-business owners in emerging nations with startup or expansion capital. Women are often the beneficiaries of such loans. Impact investing need not always be profitable as investors often factor in social gains or goals.

Key Takeaways

  • Impact investing refers to an investment strategy that generates not only financial return, but also a social and environmental impact.
  • Investors who follow impact investing consider a company’s commitment to corporate social responsibility or the duty to positively serve society as a whole.
  • This strategy appeals largely to younger generations who want to give back to society.

Special Considerations

Because socially and environmentally responsible practices tend to attract impact investors, companies can financially benefit from committing to socially responsible practices, and investors also tend to profit. A 2018 study by the Global Impact Investing Network (GIIN) found that over 90% of impact investors reported that their investments were meeting or surpassing their projections. Impact investing appeals largely to younger generations, such as millennials, who want to give back to society, so this trend is likely to expand as these investors gain more influence in the market. By impact investing, individuals or entities essentially state that they support the message and the mission of the company in which they’re investing, and they have a stake in the company’s welfare. As more people realize the social and financial benefits of impact investing, more companies will engage in social responsibility.

Types of Impact Investments

Like any other type of investment class, impact investing provides investors with a range of possibilities when it comes to returns. But the most important thing is that these investments provide both a financial return along with keeping in line with the investor’s conscience. According to a survey by the GIIN, the majority of investors who choose impact investing look for market-rate returns. Investments vary, with the choice for investors to put their money into emerging or developed markets. Investors have the option of investing in a number of industries including:
  • Healthcare
  • Education
  • Energy, especially clean and renewable energy
  • Agriculture

Impact Investing vs. Socially Responsible Investing

Impact investing is a subset of socially responsible investing (SRI). SRI is also referred to as sustainable or socially conscious investing. In some spheres, this kind of strategy is also called green investing. While the definition of socially responsible investing encompasses avoidance of harm, impact investing actively seeks to make a positive impact by investing, for example, in non-profits that benefit the community or in clean technology enterprises.

Investors who practice socially responsible investing tend to believe and choose companies that meet their views with respect to human rights, environmental protection, and a sense of responsibility to consumers. For example, some investors may choose not to invest in companies that promote cigarette companies because of their overall impact to people’s health. Many asset management companies, banks, and other investment houses now offer funds specifically tailored to socially responsible investors.

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Companies to invest in 2019




SOURCE: http://www.investopedia.com/articles/investing/060915/impact-investing-how-it-works-and-how-invest.asp


Written by CIA



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