If you calculate the social and/or environmental benefit your planned investment will bring about, and include it in your investment budget as well as the profitability calculations, your investment will provide you social and/or environmental added value in addition to financial profit. Impact investing is like a filter you use whilst calculating the investment budget. There is a triple-digit profit on an investment made by targeting impact investing; risk mitigation, profit, and social and/or environmental impact.

• The Impact Investing model overthrows the traditional belief that investments can be made only for financial returns whereas social or environmental issues should be resolved by donations alone. Impact investing is not a philanthropic activity.
• The Impact Investing model aims to generate financial income from the investment while seeking the opportunity to invest in social or environmental issues. This way, the investor not only makes financial profit, but also makes an investment in order to solve the social and/or environmental problem that she/he prefers strategically to create a positive impact.

Impact investments are being implemented in both developed and developing countries around the world. They take place in areas that await social and environmental solutions in reference with the Sustainable Development Goals. Sustainable agriculture, renewable energy, energy efficiency, financial inclusion via microfinance, accessible health, and equitable education services are just a few of them.

• Impact investment provides financial return; it is not philanthropy
• Impact investing causes enhancement in social and environmental issues
• Sustainable Development Goals are the guidebook of impact investing
• Next to financial performance, social and/or environmental performance is also measured through impact investing
• They are long-term investments

• Banks
• Insurance companies
• Individual investors
• Fund managers
• Private-equity companies
• Pension funds
• Foundations
• Public organisations
• Public companies
• Private companies
• Municipalities
• Development agencies
• Non-profit organisations

• The aim of the investment is to contribute to the solution of social and environmental problems
• Targeting financial return between below market price and risk-adjusted market price
• Using various types of assets in investing
• Investor’s commitment to measuring and reporting social or environmental performance

Philanthropy is not impact investing; it is donating resources to the ones in need in terms of money, goods, and even time. The donor is often motivated by gratitude and a sense of giving back to the community. The reason for donation may also be religious and social motivations such as being responsible to the society. The donor may make a donation, believing that their success in business is due to the opportunities the society provided, and that they should give a share of their achievements. Philanthropy does not aim to make a profit.

CSR is not impact investing; it is about sustainability and integration with society. It has a crucial role in the protection of the environment, human rights, and sense of ethics among the corporate. It also determines the company’s image and reputation and can indirectly affect the company’s financial and economic performance. CSR projects aim not to make direct profit, rather aim to enhance the public image and reputation of the company.