Introduction
Today, we’re diving into the world of social impact investing and ethical finance. To truly understand this field, it’s important to be familiar with the key verbs that shape the conversation. So, let’s get started!
1. Assess
When it comes to social impact investing, the first step is to assess. This involves evaluating the potential social and environmental outcomes of an investment. It’s about understanding the impact beyond just financial returns.
2. Align
Ethical finance is all about aligning your investments with your values. It’s about ensuring that your money is supporting causes and companies that resonate with your beliefs. So, you ‘align’ your investments with your principles.
3. Engage
Engagement is a crucial aspect of ethical finance. It’s not just about investing; it’s about actively participating in the decision-making processes of the companies you invest in. You engage with them to drive positive change.
4. Screen
In ethical finance, ‘screening’ refers to the process of filtering out investments that don’t meet certain criteria. This could be excluding companies involved in activities like tobacco or weapons manufacturing.
5. Advocate
Advocacy is a powerful tool in the world of social impact investing. As an investor, you can advocate for policies and practices that promote sustainability and social responsibility. Your voice matters.
6. Integrate
Integrating social and environmental factors into investment decisions is a key practice in this field. It’s about considering not just financial performance, but also the broader impact of an investment.
7. Report
Transparency is essential in ethical finance. Companies and funds are expected to report on their social and environmental performance, providing stakeholders with the necessary information to make informed decisions.
8. Collaborate
Collaboration is often the key to driving meaningful change. In the realm of social impact investing, it’s about working together with other investors, organizations, and even governments to address pressing issues.
9. Innovate
Innovation is at the heart of this field. It’s about finding new and creative ways to tackle social and environmental challenges, whether through financial instruments or business models.
10. Measure
Finally, measurement is crucial. To truly understand the impact of an investment, you need to have robust metrics in place. This allows for accountability and continuous improvement.
