Impact investing is an investment approach that intentionally seeks to generate measurable positive social or environmental outcomes alongside a financial return. It is distinguished from conventional investing by the explicit intent to create impact and by the commitment to measure and report that impact against defined indicators. Impact investing spans asset classes and is a core practice within sustainable finance.
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- Practitioners define a theory of change, select impact metrics, and report outcomes using frameworks such as IRIS+ and the Impact Management Project’s five dimensions. The discipline balances intentionality and additionality against the risk of impact-washing, making rigorous measurement essential to credibility.