Do you know the Impact InvestmentDo you know how it works in? Brazil?
In this article you will find:
- What is impact investing?
- Impact Investing in Brazil
- Why invest with impact in Brazil?
- Democratization of impact investing in Brazil
In recent years, socio-environmental issues have gained strength with the increase in inequalities and of the climate change. This context also influenced the financial sector in Brazil and in the world, driving the growth of impact investing as an attractive alternative for those looking for align financial return with positive socio-environmental transformation.
What is impact investing?
The impact investing is an approach of investment that matches financial return with measurable socio-environmental impact and positive. It involves investing in businesses whose main activities aim to solve social or environmental problems. Organizations of this type work with impact first, that is, the factor socioenvironmental impact generated has a greater weight in relation to profit.
The so-called impact business stand out for combining socio-environmental mission with financial viability, becoming competitive and attractive for investors.
An example of an impact business is Belterra, an organization focused on the promotion and development of Agroforestry Systems (SAF), which aim to restore degraded areas across Brazil through partnerships with small and medium-sized properties.
Impact Investing in Brazil
This type of investment is growing in Brazil. Assets under management total more than R$ 18.5 billion, according to the report “Impact Investing in Brazil – 2021”, by the Aspen Network of Development Entrepreneurs (ANDE).
According to the same research, sectors such as agriculture, education, health, biodiversity and conservation are among the most sought after by investors in the country. The climate change, for example, are one of the biggest concerns of Brazilians: 71% of Brazilian investors include impact businesses related to this agenda in their portfolios, and 26% have all their investments focused on climate initiatives.
Why invest with impact in Brazil?
The Brazil has strategic advantages that make it a fertile territory for the impact investing. Your rich biodiversity, natural resources and creativity of the population provide a solid basis for aligning economy and positive impact.
You Brazilian impact businesses play a crucial role in combating social inequalities, in strengthening bioeconomy and in the sustainable use of sociobiodiversity. Furthermore, the impact investing in Brazil is a powerful tool for:
- Reduce inequalities: impact businesses promote social inclusion and income generation;
- Preserve biodiversity: impact investments help keep the forest standing, encouraging sustainable practices and reducing deforestation;
- Supporting the low-carbon economy: several investments are aligned with global emissions reduction and sustainability goals.
How to structure an impact investment operation in Brazil
For companies and organizations that want to go beyond one-off initiatives, the most important step is... to have a specialized structure. This involves define a clear impact thesis — what causes, territories, and results are intended to be achieved —, choose the financial instruments best suited to the profile of the operation. and to guarantee rigorous criteria for the selection and measurement of funded deals..
This is precisely the work that Sitawi Finanças do Bem performs.. With over R$ 37 million mobilized in funding for socio-environmental impact businesses, Sitawi It acts as a strategic and structuring partner for blended finance operations for companies and development organizations that want to transform intention into real impact, with market-competitive financial returns and transparency regarding the results generated..
