Viewpoint on impact investing

May 23, 2016
By BlackRock

The desire to marry socially and environmentally responsible investing with financial results has never been greater. BlackRock’s Deborah Winshel discusses the trend that’s having an impact beyond the wallet.

What exactly is impact investing?

Impact investing seeks to achieve two objectives at the same time: securing competitive market returns while also having a positive social or environmental impact. You’re not simply refraining from investing in something that doesn’t align with your beliefs; you’re focusing on companies that are operating responsibly and having a positive impact on the world.

Is there much demand for this sort of investing?

Sustainable, or socially responsible, investing has been around for many years, but a host of factors has recently brought it to the fore, and expanded it to include impact. The demand is partially driven by interest and advocacy among women and millennial investors who control a larger share of assets today. Demographic shifts, stakeholder advocacy and government regulation have also combined to create unprecedented demand for sustainable and impact investment solutions.

Is impact investing the next level of sustainable investing?

To some extent it is. Here at BlackRock, we focus on three primary segments of socially responsible investing: exclusionary screens; environmental, social and governance (ESG) factors; and impact investing. Exclusionary screens remove specific products or industries that don’t align with an investor’s values. ESG considerations look at not just what a company does but how it does it. And, as mentioned, impact investing goes beyond exclusion to active selection.

Is this investing trend sustainable?

Absolutely. We believe the best companies strategically manage all aspects of the business. ESG issues — ranging from climate risk to diversity to board effectiveness — can lead to long-term value creation. Investors are just starting to acknowledge and value this.

Deborah Winshel
Managing Director
Deborah serves as Global Head of Impact Investing. She is responsible for leading and unifying the firm's impact efforts and oversees BlackRock's Philanthropy ...