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Financial Basics

Impact Investing

Doing good while also doing well

We are living in an era of growing social and environmental awareness. As a result, many people - especially young adults - are looking to make investment decisions with the goal of creating positive social or environmental impact, as well as a financial return.

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What percentage of young adults agree that social, political or environmental impact of their investment is important?

That’s right!

According to our 2018 U.S. Trust Insights on Wealth and Worth® survey, 87% said that impact investing is important. 

It’s even more than that!

According to our 2018 U.S. Trust Insights on Wealth and Worth® survey, 87% said that impact investing is important. 

man on boat

Intro to impact investing

Sustainable and impact investing incorporate environmental, social and governance (ESG) considerations into investment decisions. The intent is to deliver competitive financial returns, as well as seeking positive environmental or social impact relative to the broader market.

Impact investments can be made in:

  • Developed or emerging markets
  • A specific company or a fund
  • With a for-profit or nonprofit company.


Impact investing versus philanthropy

Impact Investing isn't the same as philanthropy. While both concepts focus on doing good, impact investing also provides an opportunity to potentially generate a financial return.

Impact investing

Seek to affect change while still targeting competitive financial returns. Depending on your resources, needs, goals and commitment, you can choose to pursue impact investing via different “lenses”.

Classic investing

Seek to maximize returns within the risk/reward framework without an intentional focus on whether the investments are making a positive impact.


No investment returns, (although there are possible tax benefits) however, there is an increasing focus on measuring impact.

Four key approaches to impact investing


Socially responsible

Seek entities based on investors’ preferences

Seek to avoid investments associated with:

  • Environmental harm
  • Tobacco, firearms, alcohol
  • Practices that are in conflict with religious beliefs


Proactively choose entities that excel at a range of ESG factors

Seek out investments in companies that:

  • Promote and achieve sustainability
  • Encourage and measure corporate social responsibility
  • Are leaders in fair trade and factory worker safety


Seek investment opportunities that focus on environmental or social themes

Target areas of growth in:

  • Green initiatives, such as climate change or water security
  • Gender equality and diversity
  • Health care and the global trend toward obesity

Impact first

Seek investments dedicated to addressing specific social or environmental concerns using market-based strategies

Pursue investments that aim to:

  • Improve early childhood education
  • Reduce prisoner recidivism
  • Address homelessness
woman on tablet

What motivates impact investors?

More than ever, people (especially millennials) are motivated to begin impact investing. What motivates them?

  1. It’s the right thing to do: 50%
  2. Corporate America should be held accountable: 50%
  3. Strong personal feelings for certain issues: 39%
  4. Want to make a positive impact on the world: 39%
  5. Progressive companies are less susceptible to business risks: 37%
  6. Progressive companies have better financial performance: 35%

Source: 2018 U.S. Trust Insights on Wealth and Worth® survey


Myths vs Realities


Myth: Sustainable and impact investments underperform traditional investments.

Reality: Integrating ESG factors into investment analysis may actually help improve risk-adjusted returns.1

 Myth: Sustainable and impact investing is a niche market with few investment options.

Reality: In 2018 alone, 37 sustainable funds were launched in the U.S., 18 of which were sustainable exchange-traded funds (ETFs).2

Myth: ESG data is static, inconsistent, and limited to corporate disclosure.

Reality: ESG data is continually improving. In 2017, over 85% of S&P 500 companies produced a Corporate Social Responsibility report. This provides increased consistency due to Global Reporting Initiative guidelines and the Sustainable Accounting Standards Board.3

Myth: Direct investments in private companies are the only way to have an impact.

Reality: Sustainable and impact strategies cross asset classes including public and private equity, fixed income, and other alternative investments.4

2 women sitting in field

Ready to make an impact?

If you're intrigued about the possibility of aligning your investment goals and your beliefs, think about these questions as a next step.

  1. Where is my passion? Which global or local challenges excite me?
  2. How do I translate my passion into investing? Speak to your advisor about the role your investments can play here.
  3. What are my investment objectives?
  4. What amount of money do I want to initially invest in impact investing?