Impact investing is an investment approach that assesses the value a business creates in the form of solutions to society and attempts to translate this solution into value for investors

If you wanted your money to help society, you used to be limited to giving it to charity or refusing to invest in “sin” businesses, like gambling.

But companies are figuring out ways to make good deeds profitable with an investment approach called impact investing.

Allar and Matt are joined on the podcast by Uli Grabenwarter of the European Investment Fund, who explains that impact investing considers the benefit a company has on society alongside its profitability.

“Responsiveness to societal needs is factor of competitiveness for our businesses,” Uli says on the European Investment Bank’s A Dictionary of Finance podcast. “In the future, most of the value that we create with businesses will be equivalent to the value those businesses create for society.”

He has a thought-provoking example of a different approach to business, with a positive social and environmental impact, from Amsterdam’s Schiphol airport.

Uli also discusses the sharing economy, which seeks to make creative use of finite resources. Think about how much time each day you’re not using the things you own. What if others could be using them at those times? Uli lays out how this might work.

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