A Brief About Impact Investing and the Associated Challenges

 Impact investing serves goals beyond just financial targets. It seeks to generate returns on both the commercial and social or environmental fronts. Intentionality is the explicit pursuit of positive social and environmental outcomes.




Before investing, this intentionality must be supported by using facts and figures that demonstrate a contribution to those goals. Additionally, one must manage and keep an eye on the impact performance while investing.


As you can expect, impact investing has several difficulties, particularly with data and people's lack of familiarity with it.


Without significant and reliable data available on the market, investors may be forced to create their own investment universe using their criteria. Although this has improved, it is still difficult to distinguish between impact investments and other types of investments. Standard finance solely considers a company's or investment's financial return in light of its risk profile.


However, an impact investor is also interested in whether a company generates social value, which the traditional financial institution is ignorant of. Specialized industry experts examine significant externalities and contributions to the Sustainable Development Goals of the United Nations to determine environmental and social worth. Such a qualitative analysis allows for identifying businesses with good impact potential. 


Using such a strategy, specialists develop stock portfolios in the ideal position to generate value in both financial and societal terms. For more detailed information, read the blog mentioned below.

Read the blog- https://www.centrolaw.ch/en/insights/detail/guest-series-impact-investing-discovering-underlying-value

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