Understanding Impact Investing
“We need to start to talk about money in ways that dethrone it and make it subject to human ethics and standards of love and decency.” ― Joel Solomon
Impact investing contributes heavily to big issues solving, like education, health, food supply, poverty eradication, climate and environment, waste management and recycling, energy and new sustainable technologies (see full list of beneficiaries’/recipients’ areas and sectors).
To contribute personally to a better world, as a real “actor,” smart investors and UHNWIs commit themselves financially and in a responsible way of backing innovations and business models. Countries’ borders don’t exist anymore either to do it.
That all is part of a new investment trend, combining both financial and philanthropic individual investment and positive returns for our unique planet, including markets.
The status of our current world is also at a critical point for many issues, and it is time to suggest creative solutions, including sometimes of very original forms which are entirely different than what the market knows typically and uses.
Such actions have substantial positive implications, both for “our” world, but also and initially for the investors, at the level of their reputation and respect, among others.
There are many advantages (USPs) and reasons for the Investors, VC’s and UHNWI to be actors of and to follow Impact Investing, for instance:
Global challenges, like education, healthcare, poverty, environment/climate change. The market and the individuals have to contribute and find high-quality solutions as opposed to high (and highest) cost quick fixes to offer efficient projects’ realization. Private capital is seriously needed to help all common entities.
Get important and steady ROI Those of today’s challenges are global opportunities in the long term. The first investors will win already in a few years, and in a long time, both with significant and stable ROI, and also at the level of the reputation, responsibility and personal respect.
Portfolio diversification and stabilization Impact investing is a useful complement to other investments types in your portfolio. Additionally, the volatility of ethical and social impact funds has also proved to be lower than comparable non-impact funds.
Your capital is working and useful Impact investments will, even better than charities or donations, allow you to get a high return percentage, including on the projects funded by the recipients. This “genuine” form of investing is exciting as it is an act of investing and giving at the same time.
Impact Investment reflects your values Your responsibility and commitment show which are your real values, and you can also decide to share your visibility in showing your name or company on the projects funded of the recipients, as a kind of “ethical sponsor.”
“Smart” Investors ask now for this specific type of investment Impact investing also contributes for the investors, to be able to remain at the top and most sophisticated form of investments in the market.
A new Investment community or “Exclusive Investment Club,” forming a high-level Think Tank
The different high-level individuals, companies, entities, institutions and communities over the world, can gather around and in Impact investing, as, even from numerous and diverse backgrounds. They all follow the same positive and constructive objectives, both financially and ethically, to allow the world to get better in contributing heavily to solve with concrete solutions the current and future major issues and challenges. They all also contribute to elaborate an ultimate form of an “Exclusive Impact Investment Club” of the highest level.
Investing in culture change Impact investing is the newest and most interesting investing trend and opportunity. It will gradually but surely take more importance within the investment mainstream, and a will represent a significant investment reference. Impact Investing will therefore also participate actively to change the standard and current investment status and habits.
Opportunity to act globally Impact investments will allow investors to both get a more comprehensive overall view and horizon and involve themselves directly in a change trend, seeing the positive consequences on shaping a better world thanked their implications and actions.
Your values to get a better world The world economy and state are thoroughly globalized, for a long time now, and any event has an immediate impact all over the globe. Any actor or agent should have the moral responsibility to bring up and promote the ethical values in the market. Impact investing is just one major part of the whole, but the impact is, and it makes sense because it is going in the right direction. The futures generations and the whole world will thank the “Impact Investors” later on.
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Ronald Jean PARATTE is a Senior International Business Development Consultant Executive, Banker & Economist based in Geneva, Switzerland. Master (M. Sc.) in Economics, Banking Diploma Cambridge, and Business Management Consultant Diploma.
Mr. Paratte is also the Inventor, Founder, CEO & Chairman of the Board of LUX AND WORLD Ltd. “LUX AND WORLD” is the world leader of Philanthropic, Ethical, Humanitarian, Social and Sustainable Luxury. One of the main and principal ideas and innovation of LUX AND WORLD is to create, establish and use a relation, a link, between the Luxury Products and Services industry, and, the International development projects. Specific and unique. LUX & WORLD creates this relation directly and with immediate (real time) effect in the market.
Ronald Jean PARATTE may be contacted on 00447743543056.
Freely adapted by Ronald Paratte, for Lux And World, from source: Ibrahim AlHusseini Investor |Philanthropist | Founder Forbes
Thank you – this is a very good article. It resonates with my thinking on an ethical level, but also on an investment basis. I believe many people who are touched by impact investing benefit tremendously and it’s normally on a large market scale. So there’s no reason it can’t be profitable for the agents of change ( especially the investment community who pursue thought leadership). We’ve been fortunate that a global corporation saw the opportunity to support our efforts. Given the right conditions (innovation, investment & delivery) everyone benefits and society improves.
Ian, Ronald’s article is a wonderful piece indeed, and we were delighted to include it in our Leadership section. Keep enjoying the Chronicle.