2019 06: Article in Real Leaders
YOU CAN BE AN IMPACT INVESTOR — STARTING NOW
Impact investing is about engaging your heart, mind, and soul; it’s about investing as a human being, taking charge of your investment portfolio, and aligning it with your values. Impact investors don’t see their investment activities as an intellectual exercise to make money; they see their investment portfolio as an expression of who they really are. They lead with their heart, with compassion, empathy, and awareness. They lead with the intention of making a positive contribution to humanity and the planet.
At the start, impact investors can be overwhelmed by jargon, products, and “impact washing.” My advice is first to know what you own and then detoxify your portfolio by getting rid of investments that are counter to your beliefs. It’s best to do this with a trusted investment advisor who supports your impact journey. If your current advisor doesn’t fit the bill, then it’s time to change that, too.
As a next step, choose ESG-rated (environmental, social, and governance) products, particularly around your public equity and debt allocations. Explore more profound impact with direct investments through friends in the impact sector or through social venture funds. Don’t forget to engage your heart, mind, and soul. If you only invest with your mind, your impact will be accidental at best, and if you only invest with your heart, you’ll likely lose a lot of money.
And critically, listen to the current framing between what many call market-rate returns and impact as a black-and-white type of trade-off. It’s not! Impact investors expect an appropriate financial return for the impact they want and for the impact risk they are willing to take. Ultimately, my most important piece of advice is: Don’t wait, start now.