Impact investing is the sexiest term in the investment community right now. Arguably, there isn’t much competition for the title, but don’t let that stunt our appreciation!
I read about ‘impact investing’ in investment industry write-ups. I see it in advertisements targeting millennial investment dollars. I see it on on countless LinkedIn profiles (John Snow is a swordsman, a man of the Night’s Watch, a Wildling lover… and a passionate impact investor). I see it in articles on philanthropy. It’s everywhere.
When we discuss socially responsible investment (SRI) with peers and investors we often get one of three responses:
Often, when I tell people that my firm specializes in sustainable investing, I am met with skepticism. "That's great, but don't you give up long-term performance?" Or, "I'm all for socially responsible investing, but I'd like to retire someday and I need my investments to do well."
Here's my usual response:
One of the questions I get asked most often is “What is socially responsible investing?” My response is that at its core, socially responsible investing (or SRI) is about investing in a manner that is coherent with your personal values and beliefs.
Most investors don’t know what is in their investment accounts, be it an IRA, a 401(k) or an after-tax account. Sure, they own ETFs (exchange traded funds) and mutual funds, and maybe even a few individual stocks, but it takes a lot of extra work to figure out what exactly is inside those investment vehicles.