Connecting people, planet and profit.
Around the world, there is a growing interest in market solutions that hold companies more accountable and help ensure they make a positive impact. More and more, investors are participating in this sustainable investment strategy, incorporating social, environmental and governance factors into their investment decisions. Through impact investing, one type of sustainable approach, we are helping many of our clients use their wealth to contribute toward a more renewable society—as well as a potentially profitable portfolio.
How it works
At UBS, we define impact investments as those that finance companies, organizations and funds make with the intention of generating social or environmental impact alongside a financial return. Impact investing adds a third dimension to traditional investing—the inclusion of non-financial criteria in our evaluation of opportunities.
What qualifies as an impact investment?
In addition to the generation of financial returns, three other criteria define an impact investment solution:
- Intent. The solution must have a stated and explicit intention to generate positive social and/or environmental impact.
- Measurement. The outcomes of the investment should be tied to specific metrics and measured against a base case or benchmark.
- Verification. There needs to be established proof that the invested capital itself is positively correlated with the intended outcome. Proof of verification requires scientific and/or statistical tests linking impact to outcome.
While still comparatively small, the impact investing industry is growing quickly and is currently one of the most innovative and vibrant segments of the financial markets. We‘d welcome the chance to talk about how impact investing could fit into your overall wealth strategy.
