27 Dec 2013

5 reasons to invest with making a positive impact on the society

1 Comment

Over the last decades we have seen an ever-growing number of consumers paying more attention about what they eat (organic products, meals made of natural ingredients), because we have (re-)discovered the impact of good food on our health.
Food is deemed as a precious capital for the human being. But what about a more regular capital, every family tries to secure : their financial savings ? Have we ever asked us how we can get a long-lasting and positive impact on our life from their utilization ?

Do you think it is worth being so much focused on good food if in the same time we put ourselves (unintentionally) at risk by the fact of investing in business activities generating side-effects that deteriorate at the end of the day our social relationships and our environment of living because of industrial pollution, growing demographic pressure on food supply, etc … ?

If we were demanding the same type of criteria for the allocation of our savings than for eating – i.e. ensuring that our money will help improving our health – it would significantly get our living standard more sustainable.
Indeed, as you are used to checking where your tomatoes come from or how the chicken you bought was bred, you can also ask your banking account manager or financial adviser more details about the utilization of your money when it is question to invest, in order to make your own opinion on the potential collateral damages that could result.
As a conclusion, investing without sound principles and guidance can severely hit our own well-being.
What we call “impact investing” is when you intentionally invest with the aim to get a positive social/environmental outcome alongside a financial yield.
The reasons to invest with considering the impact are manifold. Here is a non-exhaustive series :

small medium enterprise1) Taking care of the impact of your investment will help act local, not only act global.
Supporting the small economy results at the end of the day in better condition of living for everybody.
We all know that +/- 80 % of the working population in the world comes from small and medium enterprises. These companies have a direct impact on the day-to-day life of a large array of the population including the most vulnerable people. Investing in small businesses – provided they are governed and managed with responsible rules – support a sustainable economic development, because they are generally more aware of their role and responsibility in the society than the bigger ones.
Financial markets2) Taking care of the impact of your investment help secure more steady and foreseeable revenues, because you are aware in what you invest.
Considering an investment opportunity for its expected financial yield only, gets you totally dependent from the ups and downs of the financial markets. As they are massively disconnected from the real economy, they are not a good indicator to follow. Understanding what you invest in increase your power to make the difference between what you can expect from an investment against another one.
You will make less risky decisions in your allocation strategy which results in a better global performance on your assets than when you invest without looking for and analyzing the potential impact.
responsible business3) Taking care of the impact of your investment help promote sound business practices built upon permanent trade-offs.
If you invest for your selfish interest, you can earn a lot on the short-term, but at a certain point of time you will lose if there is no win-win result : what your earn may be detrimental to others. If the economic wealth is not distributed enough among everybody or if it is not offset by social transfers in favor of the poorest, it comes up to social unrest and revolutions. Old and most recent history as shown what can occur and what is the aftermath.
Paradigm Shift4) Taking care of the impact of your investment help companies being more innovative.
We are all aware that important changes in our way of living are required to face the growing demographic and the environmental challenges. It relates to our consumption behavior, choices of mobility, concept of well-being … With raising the retail investors’ awareness on the social and environmental impact that our money can make, we create the demand in impact investing. This make eventually the time ripe for increasing significantly the pressure on the companies, on the banks and on the financial markets to get the economic model more sustainable in its whole.
Family5) Lastly, taking care of the impact of your investment help avoid the uncomfortable experience where your children may ask you sooner or later :
“Mum, Dad … why have you put your savings into unsustainable financial products and investment opportunities although you have known that the social and environmental situation was worsening ?”. Good luck to answer that question if you are not prepared for this … !

One Response to 5 reasons to invest with making a positive impact on the society
  1. Join one of the Toniic practice group like 100% impact network and dedicate 100% ot your assets to impact !

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