A new report by the EU’s Science for Environment Policy service provides suggestions on how to encourage even more ‘impact investment’, in particular green investment.
This comes as a result of Responsible investors are increasingly seeking demonstrable environmental and social impacts for their investment, not just financial return.
The report brings together the latest research into impact investment, a small but rapidly growing sector which shows great promise in channelling private investment into green projects, including renewable energy, nature conservation and sustainable forestry initiatives. It can also help governments meet their goals, such as the UN’s Sustainable Development Goals, and benefit green-minded businesses which want to make a difference as well as a profit.
Measuring impact is key
Like many other socially responsible investment strategies, impact investment seeks to achieve positive social or environmental impacts, but it is marked by an intention to generate measurable benefits, such as cuts in CO2 and pollution. However, herein lies one of the sector’s greatest challenges: how to measure impact.
The wide range of tools available for measure the impact of investment are typically resource-intensive for investees, and can make it hard for investors to compare investments. Further threatening to undermine investor trust – and the flow of money – are the interrelated issues of ‘greenwashing’ and transparency.
Thus, to help tip impact investment from a niche sector over into the financial mainstream, research suggests that more efficient, standardised approaches to impact measurement are needed, with transparent methods and data.
Greater liquidity is needed
Impact investment also needs to remove the barrier of illiquidity in order to grow as a sector. This refers to potential difficulties faced by investors in selling on their investments. As impact investment is in early stages of market development, investors may be required to accept a lower level of liquidity than normal.
Research highlighted in the report recommends expanding the range of options for trading, which move away from standard models of financial exchange – namely stock exchanges.
Reaching full potential
Together with the continually growing momentum and interest in impact investment, the proposed developments outlined in the Environmental Impact Investment report could help this promising sector to reach its full potential in contributing to a greener society and economy.
Like our Facebook Page
Can You Maximize Your Profits While Investing Ethically?
Environmental Benefits of Living in Miami. Why Is It Worth Moving There?
5 Ways To Shift To Green Energy At Home
Advantages of Free-Range Farming for Eco-Friendly Consumers
What is Eco-Friendly Investing and How Can You Embrace It?
Green Software Ideas to Implement with an Offshore Development Team
5 Things Eco-Conscious Consumers Should Know About Private Wells
The True Environmental and Social Costs of Mined Diamonds
20 Incredible Facts Eco-Tourists Should Know About Dubai
5 Massive Benefits of Turning to Renewable Energy
6 Tips For Getting the Most from a Solar-Powered Home
7 Excellent Ways to Live a Greener Lifestyle in 2021
How the Property Industry Is Embracing Eco-Friendliness Across the Board
Sustainability in Construction: Methods to Mitigate Environmental Impacts
New Company is Driving ESG Infrastructure Development in Mining
10 Tips to Turn Your Next Holiday into an Eco-Friendly Celebration
4 Benefits of Commuting with a Bicycle as an Eco-Friendly Consumer
Some Important Facts about Eco-Friendly Glass Railings
Impact Proof of Stake Ethereum Mining on Power Industry Sustainability
7 Business Survival Guidelines All Eco-Friendly Entrepreneurs Must Follow
- Features12 months ago
Eco-Friendly Interior Design Is Easier Than You Might Think
- Features10 months ago
Eco-Friendly Hacks To Create A Durable Shop For Your Home
- Energy6 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features5 months ago
Seven Health and Safety Tips for Eco-Friendly Products in a Green Home