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Make an impact through your investing
October 4, 2019

We all want to make the world a better place, but it’s sometimes hard to know how we can make a difference other than by handing over donations to charities.

Investors globally are unleashing the power of capital to have a positive impact on the world through impact investing. The growing impact investment market allows investors to put their money to work addressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable basic services like housing, healthcare, and education.

The Global Impact Investing Network (GIIN) says the core characteristics of impact investing are:

An intention to contribute to positive social or environmental impact through investment alongside the intention to get a positive financial return. This includes setting transparent goals for both the financial and impact return on the investment.
The use of evidence and impact data in investment design, to increase the positive impact return.
Management of impact performance as well as financial performance. Data is used in decision making to align with the social or environmental objectives.

So, are impact investments just an excuse to give investors lower returns? In my view, this isn’t the case if they’re well designed and managed. The return investors get is a blended return of financial and social impact. The financial return may be more modest than a purely commercial investment, but it’s still important to ensure investors grow their capital and can continue to re-invest into more impact projects in the future.

Responsible investment practices continue to mature, and according to KPMG’s Responsible Investment Benchmark Report New Zealand has the strongest take up of responsible investment of any major financial market globally. A values-based approach to investment can also be good for financial returns, with most investors believing environmental, social and governance factors are a strong driver of long-term financial performance.

Catalist will support the growing impact investment market, by allowing you to have direct access to these types of investments. Impact investments will be clearly distinguishable on our platform from other more commercially focused investments and all investments will be required to give you all the information you need to make a good investment decision.

Look out for our announcements soon about some of the projects we’re already working with. Or if you’ve got an impact business that is thinking about accessing the impact investment market, get in touch with us today to chat about how Catalist can help.

Catalist is a good solution for social enterprises and growth businesses, providing another option for seeking capital and providing liquidity to investors where traditional methods may not be possible. Impact investing can be a win-win for businesses and for investors, with wider benefits for our communities.

If you’re interested in making a difference through impact investing, make sure you sign up for our newsletter updates.

By Michelle Polglase