What are impact investments?

When it comes to impact investments, we refer to investments made evaluating, the financial aspect, that is, the economic return, but also the social and environmental impacts of the investment. When an investor decides to invest in impact investments, it is with the objective of generating a profound impact on a social level, improving the social or environmental health, but also of achieving a financial return.

Previously, the effort to minimize the negative social and environmental consequences of trade activities was restricted to regulation and to the discretion of philanthropy. However, over the years, new strategies have emerged to minimize these impacts. As a result, they begin to expand concepts such as pollution prevention and corporate social responsibility.

It is at the end of 2007, when the term, "impact investing" first started circulating. This form of investment goes one step beyond the concept of Corporate Social Responsibility, which is dedicated to minimizing the harmful impacts or promote practices within the company; impact investments not only aim to minimize the negative impacts, but instead, actively seek to channel funds in companies that have a social logic enrooted in their mission.