Impact investing is the idea of putting your hard earned dollars to work in a way that can make the world a better place while also seeking to get you a financial return. Investors who seek these types of projects to place funds into want to be sure that their wealth is being used for good as opposed to just simply making them more money. So what are four of the top trends in impact investing today?
- The Electrification Of The Transportation Sector
- Improved Sustainability Of The Power Grid
- Tackling The Current Poverty Crisis
- Looking Internationally For At-Risk Groups
The Electrification Of The Transportation Sector
The transportation sector has long been seen as one of the biggest producers of greenhouse gasses and other forms of air pollution. This is largely due to the fact that traditional transportation methods rely almost entirely on fossil fuels. Many impact investors see the innate advantage of electrifying the transportation sector and are letting their dollars do the talking. Dozens of startups hoping to solve the complex issue of maintaining electric vehicles are receiving funding from impact investors to further explore these options.
Improved Sustainability Of The Power Grid
One of the fastest growing industries in the United States and across the globe is the renewable energy sector. This is largely due to the influx of impact investments flooding this space. Not only does supporting renewable energy help improve how green the power in our grid is, but it also provides a safe, sustainable, and reasonably high return on investment for investors as well. Additionally, some forms of renewable energy development have proven to be extremely beneficial for job growth. In fact, the single fastest growing job in the United States right now is that of a solar panel installer. This boom in job demand is largely due to impact investors who see the future as one powered by nature and not by fossil fuels.
Tackling The Current Poverty Crisis
The income gap between the nation’s richest and the nation’s poorest is becoming larger and larger by the day. This is driving more and more citizens into poverty. These individuals certainly have the odds stacked against them but thanks to the increased popularity of impact investing related to fighting poverty, their changes are improved. Examples of this include investments in social programs, improved public transportation to support easier access to jobs and a variety of other investments which can potentially help lift those who are less fortunate out of hard times.
Looking Internationally For At-Risk Groups
Across the globe, there are hundreds of thousands of people who, by the standard set by the United States, live far below the poverty line. Organizations like doctors without borders and habitat for humanity rely on donations from wealthy investors so that they can provide services to those who need them the most. In theory, as these areas of the world become more developed, there is a huge opportunity for investment in their development. Impact investors are increasingly looking overseas to help build out underdeveloped nations.
Impact investing has provided a great deal of good across the country and across the globe. As more investors seek to have their money do good instead of just receiving the highest possible returns, the world around us may soon become a better place.