– Criteria and sectors

Our credibility: Our Selection of Funded Endeavours

We will invest 100% of our assets in the real economy generating a positive impact on society and the environment.

 

What’s the REAL economy? What about the FINANCIAL economy?

Since the financial crisis in 2008, we often talk about the real economy and the financial economy. To understand the key principles, let’s keep it simple!

  • The real economy is money from the production of goods and services. It’s the economy of “real life, real people. It’s the economy of businesses and individuals working and the product of their labour.
  • The financial economy involves financial trades without the production of goods and services. It involves financing transactions or trading risk-hedging contracts, for example. It’s a trading economy that doesn’t generate actual production.

The problem

The deregulation of the 80s and the 90s generated an exponential explosion of purely financial activities, in no way supporting the real economy. THAT is the problem! As nearly everything is allowed, these financial activities have been diverted for purely speculative purposes and as tools to generate profit, therefore, creating no real value. If you think this is obscure, you’re right!

Joseph Stiglitz, Thomas Piketty and several other renowned economists estimate the weight of the global financial economy today represents 70X that of the real economy! Before 1980, it was 3 to 5 times.

Keep in mind

Driven by greed and speculation, the unbridled growth of this deregulated finance is harmful to our world! Greece, Spain, Argentina, for example, know something about it!

What is Impact Investment?

Impact investment values positive social, societal and environmental impact while yielding a return.

In addition to endorsing ‘do no harm’ philosophy, impact investors favour initiatives to develop and provide solutions to social issues.

3 Criteria of Impact Investment

1

Investor intention: Investors allocate their capital (debt, equity, or hybrid forms) in investments generating a financial return and a determined social impact.

2

Investee intention: Companies and organisations who receive the loans design their business models to create financial and social value.

3

Impact measurement: Investors and investees demonstrate how their intentions translate into measurable social impacts.

Preferred Investment Sectors

IMPAK Finance wants to invest consistently and transparently in sustainable economy sectors, namely:

  • Sustainable agriculture
  • Real estate
    • Green buildings
    • Affordable housing
  • Renewable energies
  • Environment and Water
    • Green infrastructure
    • Effectiveness of water treatment and water usage
    • Air quality — emission reduction
    • Protection of biodiversity and ecosystems
  • Financial sector

Tools promoting extended access to financial services – microfinance, for example.

  • Health

Products and services reducing health costs and improving patient comfort and well-being – for example, “connected health”

  • Social enterprises and non-profit

Impact is Profitable

For Morgan Stanley, impact investment offers competitive returns while generating positive social and environmental impact.

The data speaks! A recent study by Morgan Stanley, Institute for Sustainable Investing1, demonstrates that, for the past 7 years:

  • The performance of impact investments is either equal to or greater than the median return of traditional investment funds;
  • 72 % of impact businesses generate more profits than non-impact businesses;
  • Impact investment rose from 11% in 2012 to 17% in 2014, representing over $ 6.57 trillion.

 

1 Source: www.morganstanley.com/sustainableinvesting/pdf/sustainable-reality.pdf

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