This definition has been formulated by the Global Impact Investing Network (the GIIN) [link to: www.thegiin.org) a New York-based worldwide network of over 230 diverse organisations in the impact investing marketplace, founded in 2008. Triodos Investment Management is a co-founding member of the GIIN.
The GIIN has further defined the practice of impact investing by the following core characteristics:
Intentionality: an investor’s intention to have a positive impact through investments is essential
Investments with return expectations: impact investments are expected to general a financial return on capital or, at minimum, a return of capital
Range of return expectations and asset classes: impact investments target financial returns that range from below market to risk-adjusted market rate, and can be made across asset classes
Impact measurement: the investor is committed to measure and report the social and environmental performance and progress of underlying investments
Embracing impact investing as a formal practice
Triodos Investment Management has embraced the term impact investing since it was introduced. We believe a clear designation of this style of investing, not only formalises the whole practice, but also strengthens what we had been doing for over 25 years. The practice of making money work for positive change is, of course, much older, using different names. But by embracing what we were doing – investing in renewable energy, financial inclusion and sustainable food and agriculture, to name a few - under this one term, we felt it would help clarify to the market exactly what our intentions and activities were. And it would also support faster growth of the sector.