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“Impact Investing” author Jed Emerson on investing in a way that can have a positive impact on your community or the environment.
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Today nearly one out of every eight dollars under professional management in the United States.
Is involved in socially responsible investing that's according to a recent report now these types of bonds claimed to maximize both financial return.
And the good of the environment other social issues but is it possible to have your cake and eat it too here and tell us jet Emerson the -- -- -- impact investing transforming how we make money while making a difference.
-- -- -- the show tell us what what do you mean by impact investing.
Impact investing is a growing trend in finance where investors seek to generate a financial return on their investment together with.
Creating social and environmental impact about issues they care about.
JPMorgan says in 20/20 there could be between 400 billion and a trillion dollars invested in this way.
Why do you think it's gaining popularity.
Think it's gaining popularity because people are recognizing that there is a limit.
So what we can expect government or the non profit sector to do and a lot of the issues that we're concerned about are fundamentally economic issues and investors feel that.
The free enterprise approach is one that can drive broader value for society and that's the type investing that impact investors seek out.
I look at this over time I used to cover personal finance and no we often look at these you know socially conscious investing in typically it just didn't do as well didn't return is much.
It's a benchmark like the S&P 500 -- we even have a screen for that.
But I think we can -- -- get a sense.
The comparisons of the two.
Socially responsible funds in the S&P 500.
And if you concede if and 500 really beats up.
And it's because they've got.
The beer -- they've got the booze they've got the cigarettes they got the bullets.
And sometimes those are the stocks there really make for the returns so do I have to take a step back in do you advocates saying.
Now I don't want returns as good as the market can deliver I want something less.
Well I think what we're talking about really is not simply financial returns -- total performance than most people invest because.
They wanna have resources to do something they -- -- provide for their family wanna provide for their retirement they want to write be able to live in a good community.
What impact investing does it says that.
Instead of managing money as the -- something that you simply look at and managed impact invested is interested in using Avastin as a as an ad for where your actively structuring your capital.
To reflect the long term value hope to create as well -- -- I -- -- being an actor.
In the environment you're trying to create change figure dedicated to creating change you might do -- I can't tell you add some of the people that I know I will invest in some of these you know.
Solar panel companies the government itself.
Just this week.
Losing half of that a billion dollars in so lender act Braintree heard of that company that are big embarrassment.
It's very difficult to make money in some of these new technologies even if your heart -- -- it picking winners is difficult.
Well and we're talking about not leading with your heart the leading with your body your brain and your heart putting it together when you look at.
-- of the role that the government played.
Maybe wasn't the most appropriate role I think it's a great example of where a private sector initiative and investing might have been a better option to look at pursuing in that case.
We also have to recognize that there are real limits to what government is able to do an -- secure around and by unleashing the power of private capital to seek out investment opportunities.
That are in this middle space we really are able to unleash more potential impact -- -- value for society and investors.
Well impact investing that's the book thanks for coming in --
