The new generations are more afraid of the traditional financial markets and willing to bring purpose to their investments.

Impact investing: money with purpose

Once upon a time, investing was considered a sport for the wealthy. While in many countries it is still meant for the rich to get richer, most of the Western World have now opened to new innovative investment options which don’t even require a bank account, crowdfunding, growth ventures and microloan agencies being some of the best known.

Research shows that new generations are prone to saving their money, but afraid to invest in the traditional financial market. Many are considered too conservative, traumatized as they still are by the repercussions of the financial crisis. But there is something else that differentiates Millennials from the former generations.

And it is called Purpose.

A recent study published by Deloitte shows that 76% of Millennials support businesses that have a positive social impact. Another research points out that this generation considers investment as a statement of values and a tool for change. Last but not least, Millennials believe there is no tradeoff between impact and financial return. Together, these ideas form the core of Impact Investing, a concept which combines philanthropy, social entrepreneurship and profit-only traditional investment.

Businesses are aware of the trend and want to attract more investors by developing social and environmental actions and programs. It’s a matter of survival, as corporate social responsibility is not only about having a good image, but also about attracting clients who want to consume consciously. In doing so, ‘good companies’ build solid and sustainable profits and… they bring the attention of demanding, purposeful investors of all sizes. Following the trend, banks like Credit Suisse and JP Morgan are creating funds based on impact investing, and even Stock Exchanges are giving more space to these investments, as evidenced in the UK with the Social Stock Exchange (SSE).

Impact investing is also about prevention, as businesses which act responsibly have fewer problems with environmental and work lawsuits, keep their employees more motivated and productive, and thus generate better results. By polluting less, they minimize potential problems with the authorities and prevent corruption, as bribes can cost dearly.

Investors the world around are concerned with the economic, as well as the social and environmental impacts of their decisions. More and more, they want to walk the talk. Are you ready to consider to do the same?

Horyou, the social network for social good, is an advocate for Impact Investing. By launching Spotlight and, more recently, Horyou Token, Horyou is also investing in social impact alternatives for good. Join us and be the change, be Horyou!

 

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