Impact Investing: Doing Good and Doing Well – A Next-Level Approach to ESG, According to Jeremy Liddle

Impact investing is gaining momentum as a powerful tool for positive change in the world. Defined as an intentional investment approach that seeks to generate both financial returns and measurable social or environmental impact, impact investing is like ESG on steroids, according to Jeremy Liddle.

With forecasts indicating substantial growth in the global impact investing market, reaching $4.5 trillion in total assets under management by 2030, it’s clear that impact investing is moving into the mainstream. The recent Impact Investment Summit, headlined by AFL legend Adam Goodes, brought together high-level investors, family offices, and impact investment professionals to discuss how impact investment can remove barriers to entry for marginalized groups.

The Impact X Summit, Australia’s largest global summit for climate and nature, is another example of the sector-focused approach to impact investing. This aligns with the growing awareness of climate change and other societal issues driving the momentum behind impact investing.

Unlike traditional forms of purposeful investing like ESG, impact investing goes beyond risk mitigation to actively create positive social and environmental impact while achieving financial returns. With factors like intentionality, additionality, and measurability defining impact investing, investors can align their investments with the United Nations Sustainable Development Goals or other frameworks to ensure measurable progress.

In Australia, the impact investing market is expected to grow from $30 billion in 2021 to $500 billion by 2025, driven by rising awareness of climate change and societal issues. Whether you understand the terminology or not, the trend towards impact investing is undeniable, making it a compelling opportunity for investors to make a difference while reaping financial rewards.