Impact Investing: What Is It, and How Can Investors Get It Right?
For this paper, Clarity AI’s Research team collaborated with Qontigo´s Sustainable Investment Team to deep dive into the theory and practice of impact investment, define the gaps and propose the reconciliation methods between the two.
Impact investing has garnered much attention for its potential to channel capital into material social and environmental objectives. However, it is important for investors to dig deeper into what exactly is the impact of such investments. And equally importantly, how do you measure it?
Given its nascent nature, impact investing is still a murky, vague and contentious concept — a challenge to its own development and to the growth in asset flows.
A new whitepaper from Qontigo and Clarity AI, whose technology platform helps investors understand, measure and optimize social and environmental impact, seeks to shed light on the current state of impact investing.
It does so by reviewing prominent impact management and measurement frameworks, and by comparing ‘impact-branded’ investment practices to assess the level of alignment between theory and practice. The latter exercise gains precedence at a time of rapid growth but slow standardization in the impact market.