Impact investing

Yesterday, the world’s largest investment firm, BlackRock, took a big step in confronting the threat of climate change and announced that they would now be making investment decisions with environmental sustainability as a core goal in meeting their fiduciary obligation to clients.

“Impact” seems to find itself at the head of many investment product titles. Financial institutions are quickly learning that their customers increasingly care more about the impact investments have on the environment and broader society.

“When I do good, I feel good. When I do bad, I feel bad. That's my religion.”
–Abraham Lincoln

These stirring words were spoken by arguably the greatest leader in the history of our nation; a man whose bold thinking incited perhaps the greatest progressive revolution of all time; a man who so cherished the sacred principles of freedom and justice for all, of equal rights for every man, woman and child, he gave his life for that greatest cause.

“Social responsibility” is not something commonly associated with the financial sector by most Americans. In the wake of the 2008 financial crisis, banking has consistently received some of the lowest consumer approval ratings of any industry in the country. 

Since the inception of trade, the most important part of investment management strategy has been the singular focus on yielding good financial returns.