Real estate investors are starting to take the concept of impact investing seriously, writes Richard Lowe
There is a difference between the current interest in impact investing and the more established forms of responsible or sustainable investing. The latter is fundamentally about mitigating risk and protecting value, while the former has a conscious objective to render a positive effect on society.
But impact investing is not all the same. In the first instance it can be differentiated between ‘finance first’ and ‘impact first’. In simple terms, the former aims to have an impact while generating competitive financial returns for investors, while the latter assumes a below-market return in exchange for the impact.
The reality is not nearly so binary, and the grey area between finance-first and impact-first could be ripe for future opportunities for real estate and social infrastructure investors.