Impact Investing Goes More Mainstream As ESG Strategies Change


credit: USACE on Flickr

For decades, impact investing, or the strategy of investing assets in an ethical or socially minded way, sat at the fringe of the financial and philanthropic world.

The practice has been tied to broadly defined environmental, social, and governance (ESG) factors, as some asset managers avoided investing in companies judged to be making a negative impact on the world, or increased investments in companies that were well-rated for ESG.

But in recent years, impact investing has come into the mainstream for both the broader financial industry and Jewish asset management, particularly for donor-advised funds, reports eJewishPhilanthropy.

The change is driven by donor interest in an evolved form of impact investing, as the focus shifts from ESG screens to local loan programs and shareholder advocacy.

For example, the Jewish Vocational Service in Boston is part of a Massachusetts Pay for Success program, where donors can invest in service providers and have their investment repaid by the government.

Others are going to tell you no, just investing in say, Waze or Mobileye is not really impact there's not any tradeoff between profit and philanthropic impact,' says Andres Spokoiny, CEO of the Jewish Funders Network.

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