What is the difference between impact investing and social investing?

What is the difference between impact investing and social investing?

Impact investing focuses on generating measurable social and environmental benefits alongside financial returns, while social investing prioritizes social outcomes, often without a focus on financial returns.

Can you give me examples of each?

Sure! An example of impact investing is funding a renewable energy project that also provides a return on investment. Social investing might involve donating to a nonprofit that supports education, where the primary goal is social impact rather than financial gain.

Which one is more effective for creating change?

It depends on the context. Impact investing can drive sustainable change by providing capital for scalable solutions, while social investing can address immediate needs and support grassroots initiatives.

Are there risks associated with impact investing?

Yes, impact investing can carry risks such as market volatility, the challenge of measuring impact, and the potential for lower financial returns compared to traditional investments.