IMPACT INVESTING: DOING WELL AND DOING GOOD

Today, many investors — especially young adults — are committed to improving the global community. Donations to charity are important, but there are other ways to make a profound difference.

Through Impact Investing, your portfolio can support positive social or environmental change. Impact investments can be made in developed or emerging markets, a specific company or a fund, and with a for-profit or nonprofit company. And it's possible to realize a range of financial returns on your impact investment.

WHAT PERCENTAGE OF ADULTS AGED 18-34 AGREE THAT SOCIAL OR ENVIRONMENTAL IMPACT IS IMPORTANT TO INVESTMENT DECISIONS?

 

INTRO TO IMPACT INVESTING

Impact Investing isn't a new concept, and you may have heard other terms for it, like "socially responsible," "values-based" or "ethical" investing. In the last few years, a new generation of investors has brought this strategy into the spotlight. The Global Impact Investing Network defines it this way:

"Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return."

A PERSONAL APPROACH TO INVESTING WITH PURPOSE

Impact Investing isn't the same as philanthropy. While both concepts focus on doing good, Impact Investing also provides an opportunity to generate a financial return.

Click on a tile to learn more

 

Four key approaches to impact investing

With many options available today, there are a number of ways you can invest for positive change. But, where to start? Here are four key approaches to Impact Investing. Learn more to see which may be the right approach for you.

Click on an approach to learn more

Screen out companies based on faith-based or other personal preferences

EXAMPLES

Avoid investments associated with:

  • Environmental harm
  • Tobacco, firearms, alcohol
  • Practices that are in conflict with religious beliefs

Proactively seek companies that excel at a range of ESG factors

EXAMPLES

Seek investments in companies that:

  • Promote and achieve sustainability
  • Encourage and measure corporate social responsibility
  • Are leaders in fair trade and factory worker safety
 

Investment opportunities that focus on environmental or social themes

EXAMPLES

Target areas of growth in:

  • Green initiatives, such as climate change or water security
  • Gender equality and diversity
  • Health care and the global trend toward obesity

Investments dedicted to addressing specific social or environmental concerns using market-based solutions

EXAMPLES

Pursue investments that aim to:

  • Improve early childhood education
  • Reduce prisoner recidivism
  • Address homelessness
 

What motivates impact investors?

More than ever, people (especially millenials) are motivated to begin impact investing.
What motivates them?

Click to see how these reasons stack up

It's the right thing to do

0%

Corporate America should be held accountable

1%

Strong personal feelings for certain issues

0%

Want to make a positive impact on the world

0%

Progressive companies are less susceptible to business risks

0%

Progressive companies have better financial performance

0%

Source: 2017 U.S. Trust Insights on Wealth and Worth® survey.

 

With so many progressive investments to choose from, today's investors can focus on issues that matter most to them. Take a look at the Values Worksheet. Once you've identified and articulated which issues are important to you, you can focus on investment options that align with them. Here's a list to start your thinking.

What matters most to you?

Based on your values, think about the causes that are important to you. You can use the following checklist to get started.

 

Animals

Arts and culture

Children

Civil rights

Crime prevention

Civic engagement

Disabled populations

Disease research and prevention

Disaster relief

Domestic abuse

Drug and alcohol abuse

Economic development

Education

Elderly

Employment and training

Entrepreneurship

Environment

Health care

Housing and homelessness

Hunger

Human rights

Human services

Immigration issues

International development

Literacy

Mental health

Minority rights

Population planning

Prison reform

Religious freedom

Science and technology

Spirituality

Terminally ill individuals

Veterans and the military

Violence prevention

Women's rights

 

Ready to make an impact?

Impact investing is an appealing approach for many reasons. While making money on investments may still be a primary goal, people pursuing an Impact Investing strategy also strive to make a difference in areas they feel passionate about.

As in any type of investment, you manage risk and return with the objective of maintaining or increasing your existing wealth for long-term benefit and security. With Impact Investing, social contribution adds an important third dimension to the equation.

Getting Started

If you're intrigued about the possibility of aligning your investment goals and your beliefs, speak with your advisor about Impact Investing. To prepare for this conversation, think about these questions.


Click on a number to see

Where is my passion?

Think about which global or local challenges excite you. Use the worksheet above, or discuss with friends, family and advisors.

How do I translate my
passion into investing?

Your advisor can talk with you about the role your investments can play in contributing to your passion and solutions to relevant challenges.

What are my investment objectives?

Determine if you are satisfied by financial returns or if you see your investments as an opportunity to affect issues you are passionate about.

How do I start Impact Investing?

Once you've thought about the above questions, consider the amount of money or percentage of your portfolio that you want to start with and then reach out to your advisor for next steps.

How do I want my advisor to share
information with me?

Think about what level of involvement and communication is right for you to gain the most insight into — and value from — your investment strategy. Talk to your advisor about what will work best for you.
 

Where U.S. Trust comes in

U.S. Trust has developed a series of separately managed accounts, which allow customization of equity and fixed income portfolios in line with clients' personal values and beliefs, based on over 400 variables, such as pay equity, carbon footprint and corporate philanthropy priorities.


For investors, this type of strategy seeks to answer "yes" to an age-old question:

Is it possible to do well — make money on your investment — and do good — benefit society — at the same time?

 

Ask your U.S. Trust® advisor about how you can incorporate Impact Investing into your personal investment strategy.

AGW Print Header

HOW TO BEGIN? ALIGN YOUR INVESTMENTS WITH YOUR VALUES

With so many progressive investments to choose from, today's investors can focus on issues that matter most to them. Take a look at the Values Worksheet. Once you've identified and articulated which issues are important to you, you can focus on investment options that align with them. Here's a list to start your thinking. Your U.S. Trust© team has deep expertise in impact investing and can help you as well.

What matters most to you?

Based on your values, think about the causes that are most important to you. You can use the following checklist to get you started.