Impact Investing

Sustainable finance encompasses value creation in economic, social, and environmental areas for the good of both the company and the community. Developing largely in recent decades, sustainable finance has expanded in breadth and profitability. What began with traditional investing has become more focused on impact to include what we now call ESG, microfinance, and impact investing. People continue to approach impact investing in different ways, creating subsects of this investment like responsible, sustainable, thematic, and impact first impact investing.

Thematic impact investing in particular combines impact and profitability on an equal scale of importance in business structure. Doing so allows companies to reap the benefits of their investments while still make a substantial impact for the good the society. This differs from other forms of investments since thematic investing enacts positive change on purpose while others simply mitigate negative consequences. Of course, measuring impact and maintaining a responsible enterprise requires careful monitoring and structuring, so business must clearly define themselves and their mission to be sustainable.

The CDC group developed a set of guidelines to measure the influence of different investments and hold enterprises responsible. Investors can select impactful companies and lead them to further their positive influence. For example, thematic investing in Golden Lay Limited Gambia from the European investment back empowered them to continue preventing HIV/AIDS in affected and impoverished communities. Furthermore, Aureos capital invested in Athi River Steel Plant in Kenya in order to help them offset their environmental effect while supporting their mission to recycle steel and employ thousands of local people.