How to be an Impact Investor

In order to actualize your goal to create positive human impact and profit, an Impact Investor will need to take the following three steps:
Impact Investor Needs

Impact Investors should answer these questions by developing:

  • Investment Policy Statement (sample):  Add impact goals alongside risk, return, income & liquidity
  • Impact Scoring:  How sustainable is your corpus or endowment? How HIP Is it?
  • New Investment Evaluation: Integrate impact into your due diligence – and decision making

 

The HIP Scorecards and the HIP Portfolios can offer solutions to these, and HIP is the first RIA, that we know of, to include Impact in their investment policy statements

With Impact Scores (HIP Scores) and Impact Focused Portfolios (HIP Portfolios)
Your portfolio can seek more Impact and Profit

 

And with this in-depth analysis, you can score each Asset Class by Human Impact and Profit

 

With this focus, an Impact Investor can use Sustainability and Impact as criteria across all asset classes in their portfolio (Note: these are sample choices, not recommendations).

 

Finally, an Impact Investor can track the impact of their portfolio and alongside standard performance metrics such as yield, return, liquidity, and risk.  HIP Investor is the first RIA, that we know of, to include Impact in their quarterly performance reporting, at the portfolio, asset class, and security level.

The above report visually depicts the quantified impact of a sample client’s portfolio, broken out by asset class. It shows which assets have high impact allocations, and which ones risk financial devaluation due to changing market trends.

The chart below projects the impact by asset class across an efficient frontier over a Risk / Return axis (which can help to identify opportunities for growth).  Larger bubbles signify larger allocations, and thus, greater opportunities for improvement.

 

Investing Pledge

Lastly, please consider signing The Investing Pledge to make a public commitment to invest a certain percentage of your portfolio for positive impact by a scheduled time frame (Example: 50% by 2015 and 100% by 2020).  Your commitment could inspire others to do the same.

The Investing Pledge is a society-wide, cross-sector collaborative opportunity for impact investors across all geographies to come together to build a better world through all aspects of their portfolios.  In addition, impact investors can share ideas, find commonalities and learn from each other’s approach.

By investing wealth sustainably, these commitments can encourage and reward positive and sustainable business practices – driving the new fundamentals of investing.

For More information about How to be an Impact Investor please check out: