20/04/2024 - Lucas Chen, Media
Impact investing is the new game. Gone is the scaffolding that once propped up traditional investing when profit reigned supreme; today, investors seek avenues to profit with purpose. This surge in appetite for aligning portfolios with positive social and environmental impact is fueled by the shift in dynamics fueled by data-driven insights, technological advancement and a growing understanding of the power of capital to enact change. Some pillars include:
Data-Driven Decisions
The field of impact investing is embracing data more than ever. Impact investors increasingly utilise rigorous metrics and reporting standards to measure and track their investments' tangible social and environmental impact, ensuring their money makes a difference.
Growing Diversity
The range of available impact investments has expanded significantly, offering opportunities across various asset classes, sectors, and impact areas. This allows investors to align their financial goals with specific causes they care about, from climate change to healthcare access. For instance, at Evora, we focus on small-cap renewable energy initiatives.
Mainstreaming the Movement
Impact investing is no longer a niche market. Major financial institutions, corporations, and even governments are increasingly incorporating impact principles into their strategies, accelerating the growth and influence of the field. One of our main goals as a firm (more so as a group of ambitious young people) is to grow awareness about the movement.
Impact Measurement and Transparency
Traditionally, measuring the impact of investments, especially their social and environmental impact, faced challenges due to unclear frameworks and inconsistent methodologies. Today, the field is experiencing a significant push towards standardised impact measurement and reporting. Initiatives like the IMP (Impact Management Project) and IRIS+ standards provide investors with more robust tools and frameworks to assess and communicate the actual impact of their investments, leading to greater transparency and accountability.
Investing with purpose is no longer a niche concept. Whether driven by social justice, environmental concerns, or simply a desire to do good, impact investing offers an increasingly viable and compelling alternative to traditional methods. At the very least, more people now than ever have aligned their investing approach to the values they live by.
Evora Capital hopes that this is a trend to stay.
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