Impact investing is defined by investor and investee intentions to create measurable, positive impact over and above financial return. Investors allocate capital to investments with respect to which they expect not only to receive a financial return (ranging from return of principal to results in excess of market expectations) but also to generate a defined societal impact.
The impact investment strategy is a product strategy, which is to say that one cannot overlay impact investing on a traditional portfolio like one can with exclusionary screens, best-in-class or shareholder engagement strategies.
This section provides examples of various types of impact investment options: sustainability themed investments, international micro-lending, local micro-lending (community credit), solidarity investments, capital development funds, community bonds, private social venture investing, and deposits with credit unions.
Sustainability themed investments offer investors the opportunity to invest in themed businesses, such as renewable energy, water and waste management solutions, and clean technology.
International micro-lending allows investors to invest in micro-businesses in developing countries through an intermediary organization in Canada or capital matching platform which conducts due diligence and provides matching services designed to link investors with impact ventures.
Through community investment and community loan funds in regions across the country, local micro-lending enables individuals without collateral or a credit history to contract affordable loans designed to enhance their standard of living through entrepreneurship.
Solidarity investing (investissement solidaire) is specific to Québec and refers to the financing of social economy businesses (non-profit businesses and cooperatives).
Québec’s development capital organizations invest in local businesses to spur economic development in regions across the province.
A Community Bond is an interest-bearing loan which is that is accessible to unaccredited investors and can only be issued by a non-profit organizations.
Private social venture investing enables high net worth individuals (allows HNWIs) to benefit from a variety of private social and environmental investment opportunities.
Credit unions provide products and services that are similar to those offered by the nation’s chartered banks, but they also offer other strategies which come replete with embedded social considerations.