Impact Investing: Measuring Social and Financial Returns

Although the field of impact investing has experienced astounding growth over the past decade, there remain concerns about its ability to generate both outsized financial and social returns. Can investors achieve their desired social or environmental impact without sacrificing their financial goals? What are the differences between ESG, sustainable investing, and impact investing? How do investors evaluate impact? To better understand what an effective impact investing strategy might look like, SSIR publisher Michael Gordon Voss speaks with Juliette Menga, an investment director and chair of the ESG Committee at Aetos, and Nitin Barve, director of the Schwab Center for Financial Research.

In its broadest sense, the field of impact investing can be defined as an investment strategy that seeks to generate financial returns while also creating a positive social or environmental impact. Impact investing is attracting growing numbers of organizations and increasing amounts of money.

By some estimates, there are nearly 200 registered impact investment funds, and many foundations, networks, and mainstream financial institutions are active in the field. Impact investing contains a range of expectations about appropriate financial and social returns.

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