With over $322 billion dollars in assets under management, these funds are dedicated to everything from improving working conditions to tackling carbon emissions.
Investments in the construction and real estate (CRE) sector play a large role in determining whether cities become centers of sustainable, climate-resilient and inclusive growth, or whether they continue down a path of resource-intensive, unplanned and inequitable expansion.
IMPACT INVESTING
Mariotti Building Products
Viking Carrier
PFS CorporationImpact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.
The bulk of impact investing is done by institutional investors, including hedge funds, private foundations, banks, pension funds, and other fund managers. These investors’ intentions are to have a positive social or environmental impact through investments.
By generating profits from an innovative business model, a company can pay financial returns to investors alongside doing something good for the world. impact investing works by channeling investor dollars into companies that promote good in the world or avoid those that do not.
There are several risks and challenges associated with impact investing. One of the key risks is that impact investments may not generate the intended social or environmental impact. Another risk is that financial returns may be lower than anticipated.
Construction, both onsite and offsite, could benefit from impact investing. There are often announcements of large housing developers being funded for affordable and even homeless projects by banks, institutional investors and even large family and corporate investment companies looking to help the environment, increase social awareness and even change entire communities.
Environmental building material manufacturers and inventive people that are working to get funding for new products often turn to impact investors. Millions of dollars are poured into these companies and people almost daily.
Startups in every part of construction, as long as they fit the criteria for impact funding, are some of the targets these investors are looking for. Getting in on the ground floor of investing in a startup that actually makes a difference in the social and environmental well-being of the country and makes a profit in addition to that is the golden egg Impact Investors are always searching for.
There are two types of Impact Investors:
- Financial first investors seek to optimize financial returns, while also aspiring to achieve social or environmental impact. This group tends to consist of commercial investors who search for investment vehicles that offer market-rate returns that also yield some social/environmental good.
- Impact first investors prioritize social or environmental returns on their investments over monetary returns, while still expecting some financial return. This group uses social/ environmental good as a primary objective and may accept a range of returns, from return of principal to market rate. These investors are also willing to shoulder more risk in order to reach social/environmental goals that cannot be achieved in combination with financial returns at market rates.
Many philanthropists and businesspeople believe that impact investing could bring just the renewal and energy needed to address some of the world’s most challenging problems.
BOTTOM LINE
If your company has a proven track record in helping solve social and environmental problems and you need additional funding, don’t overlook Impact Investors.
Be sure to check out this list:
Top 10: Impact investment managers making sustainable change
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder magazine. Email at modcoach@gmail.com
