Impact Investment is a New Asset Class - JP Morgan

JP Morgan calls impact investment a new asset class

The entire area of impact investing has been growing in leaps and bounds.  Now, however, the ultimate validation of the efficacy of impact investing has emerged. Global banking power JP Morgan recently came out with a report on impact investing describing it as a "new asset class" altogether.

What is absolutely amazing is how JP Morgan's report explicitly distinguished between impact investment and socially responsible investments (SRI).  Below is a highlight from the introduction of the report:

"Impact investments are investments intended to create positive impact beyond financial return....We distinguish impact investments from the more mature field of socially responsible investments (“SRI”), which generally seek to minimize negative impact rather than proactively create positive social or environmental benefit."

Given that Green World offers a number of impact investments, we are obviously thrilled to see one of the largest financial institutions in the world lending such legitimacy to the asset class.  GreenWorld offers impact investments in the area of carbon trading, ethical farmland investment, renewable energy and forestry.  If you would be interested to learn more about GreenWorld's impact investments and/or would like to receive a copy of the JP Morgan report, please feel free to contact us at info@greenworldbvi.com

An Impact Investment in the Carbon Trading Market

In our first post, we provided an overview of what are impact investment, and in our second post we looked at the critical difference between impact investing and socially responsible investing.  We would now like to start to provide our readers an overview of some specific examples of impact investments GreenWorld offers.

To begin with, let's look at the carbon market.  In the carbon trading market, individuals and/or corporations purchase carbon credits so they can lower their "carbon footprint", or the total amount of CO2 emissions that result from their activities. Carbon offsets mitigate the environmental damage caused by carbon emissions-producing activities like using electricity, driving a car or traveling by air. From the perspective of a retail investor, he or she can actually invest into projects such as rain forest preservation or the planting and development of new trees or bamboo plants that absorb CO2 and produce certified carbon credits. Then, with the assistance of the project manager, these carbon credits are sold into the market, generally to corporations and frequently at a substantial uplift in price.  

Overview of the carbon trading market produces carbon credit investments

The investor benefits from the profit of the sale of the carbon credits, and of course the planet benefits because a new project has been developed which absorbs CO2 from the atmosphere.  In this regard, carbon credit investments actually are a proactive investment made to limit greenhouse gas emissions.  A number of banks and financial institutions, including Barclay's Bank, believe the carbon market could be the largest trading market in the world over the next 10 - 15 years.  Below is an excellent overview of how the carbon trading market works.  If you are interested in learning more about how to invest in the carbon market, please contact us at info@greenworldbvi.com.

What is the Difference Between Impact Investing and Socially Responsible Investing?

Achieve a social impact with Impact Investing

Many people use the words "impact investing" and "socially responsible investing"  interchangeably.  However, there is a definite difference between the two.  Impact investment generally focuses on achieving a positive social or environmental change through an investment.  For example, reducing green house gases through an invest in the carbon trading market or mitigating hunger in Africa by investing in agriculture in a country to ensure local food security.

Socially Responsible Investing - or SRI as it is frequently called - is generally viewed as more of avoiding a negative then the proactive seeking of positive change that underlies impact investment theory.  The main area where one can see socially responsible investing at work is in the stock market.  A socially responsible investing approach is to screen out perceived negatives such as tobacco stocks, alcohol stocks, military/defense stocks and in some cases stocks of corporations that may cause environmental damage such as coal companies.

Feel free to contact us at info@greenworldbvi.com to learn more about our various impact investment opportunities.

What is Impact Investing?

Impact Investing is a new asset class

Impact investing refers to investments that go beyond just seeking a financial return, but also try to generate a broader social and environmental impact through the investment.  The impact investment is generally made into projects that have a specific intention of generating measurable social and environmental impact alongside a financial return. 

Impact investments can be made in both emerging and developed markets, and across a variety of asset classes and sectors. In sum, an impact investor seeks to create social good or improve the health of the environment, as well as achieve financial returns.

This is just a brief overview of impact investing, and future posts we will go into more detail on what makes impact investing unique and what are some specific examples of impact investing projects.  Please contact us at info@greenworldbvi.com if you have any questions.