The Veris Approach

Impact Investing

Impact and Community Investing focuses on addressing major social and/or environmental challenges while generating financial returns. Impact Investing can be applied as a lens across an entire portfolio. Like risk and return, Veris builds portfolios with different levels of impact across all asset classes: High, Broad and Do No Harm. Impact Investing also refers to the component of portfolios that is most targeted on achieving environmental and social impacts. This may be in fixed income community loan funds or highly targeted environmental private equity funds.

 

When practiced by individuals, Impact Investing is often a way to express personal values/missions through investment decisions, whereas organizations are typically seeking alignment with their institutional mission. While Impact Investing is sometimes used to describe an investment approach, it more accurately describes a particular characteristic of an asset, like risk or return. As a result, Veris plots sustainable investments along three primary dimensions: risk, return, and impact.

On the High Impact/Lower return end is the growing field of community and microfinance investing. These opportunities are both local and global and range from Slow Food to Poverty Alleviation in Africa. Sometimes investors blend this with their philanthropic aims. On the High Impact/High return and risk end is the range of private investments ranging from Green Real Estate to Healthy Lifestyles to Clean Technology to Eco-Forestry.

Impact Investing is attracting social entrepreneurs and fund managers who are bending the lines of business, investing and philanthropy. Community Foundations are using their portfolios to solve endemic poverty while municipal governments are using their bonding power to implement renewable energy and energy efficiency strategies.

Impact entrepreneurs are even creating a new type of business entity – the Public Benefit Corporation  or B Corp– that uses the power of business to solve social and environmental problems. Evidence of their success can be seen in the high-profile successes, the publications and associations that focus on their approach, and the presence of a certifying organization.