Can impact investing really create social change?

Impact Investing

The term “impact investing” was coined in 2007 by a group of investors at the Rockefeller Foundation’s Bellagio Center who wanted to achieve a social or environmental impact. Impact investing is a global trend and has experienced exponential growth in the last decade and traditional investors are paying attention.

If this sounds like something you could get behind then you’re in luck because South Africa has a few ventures that are dedicated to making a difference. Earth Capital is a ‘Post Seed and Series A’ stage equity impact investor, which scales post revenue, commercially viable venture solutions to social and environmental issues in South Africa. Their top two goals? No poverty and zero hunger.

Another impact investing opportunity that we can get on board with is Fedgroup’s impact farming concept. Fedgroup’s unconventional approach to farming enables you to invest in sustainable farming assets like blueberry bushes, beehives, and solar panels. The best part? You don’t have to get your hands dirty. Fedgroup covers the insurance, care, harvest, and sale of the blueberries and honey are included in your purchase price. If you decide to invest in solar panels then the installation, insurance, maintenance, sale of electricity, and collection of fees are included in the price.

Not only will you be earning a passive income, but you will be investing in the growth of a business and the community around it. Fedgroup even developed a great, easy to use app that can be downloaded for free from the Google Play and Apple App Store. But are we all getting too excited?

With every great idea, there is always a downside and an article in Forbes in 2015 highlighted a few concerns surrounding this trend. The first point made was that not all social change can be implemented through the market. Capitalism has lifted millions out of poverty and has proven to be a powerful social and economic organising system. But it’s not the solution for all challenges.

Another valid, if not the most important point, was that we need to value the change made more than the profit we make. It’s great to make money – who doesn’t love a little holiday to Mauritius? But is your impact investment actually making a social change or improving a situation? These are the things we should celebrate, not the return on our investment.

With any kind of investment, speaking to a professional is where anyone should start.