The primary objective of this course is to give profound understanding of the Impact Investment discipline. Impact investing seeks to generate social impact in addition to financial returns. This investment strategy is widely used to address critical social and environmental issues, such as climate change, sustainable economic development, social inclusion of vulnerable and marginalized groups. Because of its success in contributing to the solution of social and environmental issues it has attracted an increasing interest from policy-makers and societal stakeholders which in turn pushes conventional investors to introduce impact investing in their portfolios.
There are, however, issues that make this instrument somewhat tricky. For example, the measurement of the result is difficult: impact investing presupposes the creation of a social and/or environmental impact, which is difficult to calculate. Another issue is its limitations in terms of scalability. Very often, social issues are very local and require unique solutions. Thus, one idea that suited to solve an issue in one context, can be difficult to transfer in another context, which makes it difficult to scale it up. And finally, if in conventional investing the focus is a company’s output (product or service), in the case of impact investing it is the outcome and its impact on beneficiaries. All these issues make this investment mechanism more challenging and requiring special skills from the investors’ side to understand the nature of impact investing to reach the desirable social and/or environmental impact.
Therefore, the aim of this subject is to provide students with necessary knowledge and skills to be able to develop good impact investing strategies, minimize possible negative outcomes that might jeopardize the investor’s reputation, and maximize the desirable social and/or environmental impact.