What are the risks associated with impact investing?

What are the risks associated with impact investing?

Impact investing can involve various risks, including market risk, liquidity risk, and impact risk. Would you like to know more about any specific type?

What is impact risk?

Impact risk refers to the possibility that the investment may not achieve the intended social or environmental outcomes. This can happen due to various factors, such as poor management or external circumstances.

How can I mitigate these risks?

To mitigate risks in impact investing, you can conduct thorough due diligence, diversify your portfolio, and engage with experienced fund managers.

Are there any specific sectors that are riskier than others?

Yes, sectors like renewable energy and microfinance can be riskier due to regulatory changes and market volatility. It's essential to research each sector carefully.

What resources can I use to learn more about this?

You can explore resources like the Global Impact Investing Network (GIIN), academic journals, and impact investing reports from financial institutions.