Impact investing is in the midst of explosive growth as more investors look for ways to become involved. More investment capital flowing into impact investing strategies means more opportunities to make positive social and environmental change. Yet, while growth unlocks new and exciting possibilities, it also fuels long-lingering questions.
As the impact investing industry grows, there are, for example, calls for increased clarity around definitions. What is impact investing and what isn’t? These questions become more commonplace as more people learn of our industry. The alphabet soup of related terms — ESG, SRI, MRI — encompasses hugely important practices, but might confuse newcomers seeking to integrate considerations of values and impact into their investing.
Those of us who believe in the potential of impact investing to drive social and environmental change want to make sure the term retains its value and that the industry does not lose its necessary focus while benefiting from much-needed growth. The impact investing industry is too important to the future of our world to fall victim to “definition creep.”