Impact investing is investing with the intention to have a positive social or environmental impact through your investment. To impact invest, the investor considers standard financial metrics (profits, revenues, liabilities, etc) alongside the potential environmental or social impacts that their investment vehicle may have.
For example, if an investor had a mission of increasing access to clean water in his town, he may consider investing in a municipal bond offered by his city that is going to be used to build a new water treatment plant in a low-income neighborhood. This bond is as secure and yields similar returns to a corporate or treasury bond, but he chooses the municipal water bond over other options because of its impact. The new water treatment plant increases the supply of clean water in his city and provides new high-skilled jobs in a low-income neighborhood.
The term “impact investing” didn’t officially enter the financial lexicon until the early 2000’s, but the practice of investing with more than financial outcomes in mind has been around since biblical times. In recent years, the impact investing field has been led by the Rockefeller Foundation, the Acumen fund, and others.
While the field is growing, it is still dominated by development banks, NGO’s, and private equity firms. There are relatively few opportunities for retail investors (a.k.a ordinary people without tens of thousands to invest in the market) to begin impact investing. Our goal at Koined is to create a platform where retail investors can grow their knowledge of impact investing and get connected to the opportunities that are available.
Our ultimate goal is to make impact investing easy and affordable for everyone.
