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What is the definition of social impact investment?

Investments aimed solely at maximizing financial returns

Investments made to generate measurable social and environmental impact alongside a financial return

The definition of social impact investment is accurately captured by the choice indicating that these investments are made to generate measurable social and environmental impact alongside a financial return. This aligns with the fundamental premise of social impact investing, which seeks to address social challenges while also delivering a positive financial outcome.

Social impact investments are distinct in that they intentionally aim to create benefits in areas such as healthcare, education, housing, and environmental sustainability while also seeking a financial return, which differentiates them from purely philanthropic efforts that do not expect a financial return.

This dual focus is what makes social impact investing a unique and growing field within finance and investment, appealing to investors who are motivated by both the desire to effect social change and the need to achieve financial goals.

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Investments that focus only on environmental sustainability

Investments that are philanthropic in nature

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