This article is from our Good Guide to Impact Investing, which you can download free here
We hate to state the obvious, but right now everything is pretty up in the air. Things seem to be in a constant state of flux on a global, regional, political, and economic scale, leaving many of us feeling uncertain, overwhelmed, and perhaps even a little helpless.
The pandemic, the wars, rising inflation, the energy and climate crises, and the political instability have all compounded to make future planning more challenging than ever. And for millions in the UK, the ongoing sting of the cost-of-living crisis has left them feeling like they cannot even afford to make ends meet from month to month, let alone save for the future.
A glimmer of hope
Despite the unpredictability of the current climate, impact investing in the UK has seen a recent uptick. Big Society Capital recently shared the news that investment that confronts social issues in the UK continued to grow last year, despite the recent interest rate hikes. The social impact investor’s annual survey shows the amount invested in tackling social issues increased to £9.4 billion in 2022, up from £7.9 billion in 2021.
Investors’ increased interest in environmentally and socially responsible projects during these uncertain economic times suggests a shift in priorities. The past year has seen robust support for a wide range of investment opportunities on both Ethex and Energise Africa’s crowdfunding platforms, including those in the areas of affordable housing, ethical finance, community energy in the United Kingdom, solar energy, and sustainable transport solutions for developing economies.
Our investors come from all walks of life, some investing from as little as £50 into projects that resonate with them and others putting larger sums into a growing portfolio of ethical investments. Our aim is to make investing for impact as accessible as possible for everyone because we believe that when we’re empowered to use our money to support positive change, truly great things can happen.
We believe that direct investing to create a positive impact is more important than ever for people to consider as part of their overall investment portfolio, and here are three reasons why:
1. It gives us control
At a time when many of us are feeling helpless and frustrated at the problems that we’re seeing every day, using our money to support projects and organisations that are making a difference feels good.
Impact investing allows investors to align their financial goals with their values and beliefs. We can contribute to positive change and address pressing issues such as climate change, social inequality, and community breakdown by supporting organisations that prioritise environmental and social values.
Investing for impact also gives us control over what our money does. Unfortunately, many people have no idea where the money in their savings accounts, pensions, or investment funds is going or what it is funding. At Ethex and Energise Africa, we believe in complete transparency so that our investors can see the impact of their money in communities.
2. It’s tangible
When we see the results of our investments, we know we are funding real change. We know our investors value impact, and even now, with higher interest rates on offer from more traditional investments, our community of investors continues to fund projects that are driving positive social and environmental outcomes.
At Ethex and Energise Africa, we work hard to bring to life the stories of our investee organisations’ impact so that potential investors can see the big picture of what they are funding.
Whether it is assisting families struggling with the cost-of-living crisis to access fair and affordable finance for essential purchases or empowering communities to take control of their clean energy generation, the results of direct impact investing are completely tangible, and there is great satisfaction in that.
3. It’s creating good news
We know that reading the news these days can seem pretty grim. Every day there are stories of destruction and despair, and this can have a negative effect on our mood and outlook.
However, let’s not forget that good things are happening, solutions are being created, tested, and rolled out in communities across the UK, and by pioneering businesses in emerging economies. Often, all that is needed for a grassroots good idea to grow into a solution is
the right kind of funding. Impact investing can provide the finance needed to make these solutions a reality, making it a win-win for investors and the world around them.
Download the Good Guide to Impact Investing, where we share some good news stories of extraordinary organisations doing great things within their communities and sectors – all thanks to funding from impact investors. We hope this spreads some much-needed hope and happiness.
Risk warning: Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.