Impact investing seeks a measurable social or environmental outcome alongside a financial return. It differs from sustainable investing and SRI in that the outcome is the objective and is tracked directly, rather than being a screen applied to an otherwise conventional portfolio.
Because impact is measured rather than assumed, these investments usually come with reporting on the specific outcome intended — units of housing, metric tons of emissions avoided, borrowers reached.
Historically much of this sat in private markets and was inaccessible below institutional scale. Public-market access has widened considerably, including in areas such as carbon credits and microfinance.
This definition is provided for educational purposes. It is general information, not investment, tax, or legal advice, and it does not account for any individual circumstances.