Impact investing: learn about the different types and learn how to invest

In a scenario of both national and global instability, in which political-economic uncertainties and the global environmental crisis add up to disorient the directions of capital, investors tend to feel insecure about the direction they should give to their resources, is not it? ? It was in this environment that an alternative emerged that has increasingly attracted the attention of investors and entrepreneurs: positive impact investing.

As a result of a succession of historical landmarks that changed the course of capitalism – such as ECO-92, which established a division between environmental impact and business results, the 2008 global predatory financial crisis and the establishment of the 2030 Agenda with the 17 Sustainable Development Goals (SDGs) by the UN -, positive impact applications are considered the first fruits of the so-called “purpose capitalism”. This is because they bring together, in the same initiative, profitability and measurable impact on social and environmental projects. 

Impact investing x social investment x green investment

According to the Global Impact Investing Network (GIIN, an entity that brings together global investors and disseminates the purposes of this type of investment), the amount and diversity of capital for impact investing has increased significantly in the last ten years. Currently, the global impact investing market is estimated at US$ 715 billion.

The numbers are encouraging, but an investor who wants to make his forays into this new world of investments is soon faced with some doubts: after all, what characterizes an impact investment and what is its difference between social investments and the so-called “green investments”? , so vaunted lately?

O social investment it is the allocation of resources carried out by a private company in social and/or environmental responsibility actions, in accordance with its corporate values and its business area. It aims to add value to the brand and, according to the Federation of Industries of Rio de Janeiro (FIRJAN), it also “increases consumer loyalty, increases the ability to recruit and retain talent, improves the organizational climate and makes the company subject to the process of social transformation of the country”.

already the green investments are those that focus on economic activities that promote sustainability. But this is a recent concept. In December 2019 alone, the European Commission agreed with the European Parliament and the European Council to create the first classification system for sustainable economic activities, precisely with the aim of attracting a greater flow of capital from investors in an organized manner. Among the criteria chosen by the EC are: mitigation of climate change, sustainable use and protection of water resources, transition to or adoption of a circular economy, control of pollution and protection and restoration of biodiversity and ecosystems.

sustainable and profitable

You positive impact investments they are, in turn, the pulley that allows the movement of this new gear aimed at sustainable economic activity, without losing focus on profitability. 

According to Stuart L. Hart, in the book “Business with socio-environmental impact in Brazil”, published by FGV Editora, “the organizations and entrepreneurs that will be successful in their future will be those that focus the creative energies of their people on solving social problems. and environmental challenges we face now”. 

In this growing context of diversification of investment models, the demand for mechanisms that facilitate these operations also grew, aiming to directly support impact businesses and entrepreneurs. THE Sitawi Collective Lending Platform was created in 2019 to solve this gap and promote the democratization of impact investing, creating fundraising opportunities for organizations with the purpose of generating positive social and/or environmental impact.

Want to know more about it and become an impact investor? Register on our platform  and stay on top of all impact investing opportunities from Sitawi.

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