{"id":5401,"date":"2022-01-06T23:57:42","date_gmt":"2022-01-06T18:27:42","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=5401"},"modified":"2022-09-22T11:57:19","modified_gmt":"2022-09-22T06:27:19","slug":"impact-investing-in-india-the-ultimate-guide","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/impact-investing-in-india-the-ultimate-guide\/","title":{"rendered":"Impact Investing in India Explained","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<p>Impact investing has been not only the talk of the hour but also the need of the hour.<\/p>\n<p>With growing environmental concerns, it is essential that people start taking all the big and small steps that are needed to benefit it, somehow.<\/p>\n<p>One such method that investors and traders have taken up is impact investing, which, as the name suggests, invests in making an impact.<\/p>\n<p>Impact investing now exists worldwide but is prominently visible in India as well.<\/p>\n<p>More and more people are trying to invest in products that contribute positively towards the climate and environment, and there could not be a better time to talk all about it!<\/p>\n<h2>What is impact investing?<\/h2>\n<p>Impact investing is a method where investors make investments in companies, funds, and organizations that contribute positively to the environment and generate social benefit in some way or the other, along with their regular financial returns.<\/p>\n<p>Impact investors support companies into microfinance, electric cars, sustainable agriculture, renewable energy resources, plastic substitutes, and more such initiatives that are taken up to benefit our social and environmental surroundings.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5434 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-4-e1641556635761.png?resize=800%2C488&#038;ssl=1\" alt=\"\" width=\"800\" height=\"488\" srcset=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-4-e1641556635761.png?w=2713&amp;ssl=1 2713w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-4-e1641556635761.png?w=1600&amp;ssl=1 1600w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-4-e1641556635761.png?w=2400&amp;ssl=1 2400w\" sizes=\"(max-width: 800px) 100vw, 800px\" data-recalc-dims=\"1\" \/><\/p>\n<h2>How can you choose which impact investment fund to invest in?<\/h2>\n<p>There are four main criteria based on which you can make your decision to make an investment in an impactful enterprise.<\/p>\n<p>The UBP IMAP system developed the criteria. You can score each criterion out of 5 and total it for a maximum score of 20.<\/p>\n<ol>\n<li>INTENTIONALITY or Intention<\/li>\n<\/ol>\n<ul>\n<li>This criterion includes the company\u2019s stated strategies.<\/li>\n<li>It consists of the company\u2019s proportion of capex\/R&amp;D allocation to the particular solution towards the problem.<\/li>\n<\/ul>\n<ol>\n<li>MATERIALITY or Materialism<\/li>\n<\/ol>\n<ul>\n<li>It has what percentage of the total revenues of the company is derived from areas that generate a positive impact.<\/li>\n<li>It also includes if there are any other conflicting business lines in the same field of work.<\/li>\n<\/ul>\n<ol>\n<li>ADDITIONALITY or Addition<\/li>\n<\/ol>\n<ul>\n<li>It includes if the company is a global leader in the field.<\/li>\n<li>It also talks about if there is any uniqueness in technology, approach, and solution provision from the company\u2019s side.<\/li>\n<\/ul>\n<ol>\n<li>POTENTIALITY or Potential<\/li>\n<\/ol>\n<ul>\n<li>It includes the actual potential of the proposed solution via a service\/product to have a significant effect on the world.<\/li>\n<li>It talks about whether this solution is a game-changer for the world or not.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5429 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-e1641555779499.png?resize=748%2C430&#038;ssl=1\" alt=\"\" width=\"748\" height=\"430\" srcset=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-e1641555779499.png?w=2879&amp;ssl=1 2879w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-e1641555779499.png?w=1600&amp;ssl=1 1600w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-e1641555779499.png?w=2400&amp;ssl=1 2400w\" sizes=\"(max-width: 748px) 100vw, 748px\" data-recalc-dims=\"1\" \/><\/p>\n<h2>Concerns that lead to a severe impact on investing culture in India<\/h2>\n<p>India is a land of not just rich culture, traditions, and values, but what it is also rich in is its population, pollution, degrading environment, and whatnot. Air pollution, poor waste management, and water scarcity are some of the most critical environmental issues in India, along with soil degradation, degrading quality of forests, and the list is endless.<\/p>\n<p>It was with this motive in mind, to preserve the country\u2019s environment, the air we breathe, the water we consume, and the conservation of forests that bring us so much more than just scenery, that impact investing took a serious plunge in India. Here is why impact investing is now being taken seriously in India \u2013<\/p>\n<ul>\n<li>All Indian companies are now heavily evaluated based on their environmental, social, and governance (ESG) aspects to figure out their actual growth and contribution to the economy.<\/li>\n<li>Issues like climate change and social inequality are prevalent in India, and to inform real change, impact investing seems like the only sensible step.<\/li>\n<li>Investors are now aware of what environmental, social, and governance impact a company has on an economy, and only based on that do investors invest their money.<\/li>\n<li>Sustainability funds have been growing more than ever, with an inflow of almost $186 billion in 2021\u2019s Q1.<\/li>\n<li>If we go by statistics, companies with an ESG acquiescence have performed better than nearly all the S&amp;P 500 companies.<\/li>\n<li>All companies with an ESG motive are more dependable regarding future earnings.<\/li>\n<li>Global sustainable investing is going to dominate traditional investments in the near future.<\/li>\n<li>There is more accountability from the company\u2019s side towards the socio-environmental and governance.<\/li>\n<li>The pandemic has led to a more significant socio-economic divergence that investors and companies seek to narrow down.<\/li>\n<li>Non-financial impacts are now being considered equal to, if not above, the financial impact that a company has on an economy.<\/li>\n<li>Over 80% of retail investors in India are focusing their shift towards sustainable investing.<\/li>\n<li>Nifty 100 ESG has performed better than both Nifty 50 and Nifty 100 in the last year, building more confidence towards ESG investing.<\/li>\n<li>Social enterprises and companies with any social motive are being preferred over conventional business ideas.<\/li>\n<li>Social initiatives are being heavily funded to promote a better India.<\/li>\n<li>Over $2.5 billion has been raised through equity deals in 2020 for impact enterprises, followed by $1.2 billion received in the first half of 2021.<\/li>\n<li>The scale and potential for sustainable returns in India make it a great place to start impact investing, as it offers ample social opportunities due to its high population and several related problems.<\/li>\n<li>Setting up a social stock exchange is also in the talks, which has gained the confidence of people in sustainable funds.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5430 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing--e1641555920330.png?resize=800%2C945&#038;ssl=1\" alt=\"\" width=\"800\" height=\"945\" data-recalc-dims=\"1\" \/><\/p>\n<h2>Pros of impact investing in India<\/h2>\n<ul>\n<li>It helps in bridging the gap between an investor\u2019s financial and social goals.<\/li>\n<li>It helps investors live up to their values by contributing to novel causes.<\/li>\n<li>Also helps investors help companies that have a positive intention to contribute towards the social and environmental aspects of a company.<\/li>\n<li>Offers high growth, robust profitability potential, and social responsibility through a single investment.<\/li>\n<li>Focuses on the long-term horizon from both a company and investor\u2019s perspective.<\/li>\n<li>Aligned investors with the United Nation\u2019s 17 Sustainable Development Goals.<\/li>\n<li>It offers investors a large revenue base since it follows market momentum.<\/li>\n<li>It gives the investor a first move advantage since it is a new concept that is on the road upwards.<\/li>\n<li>Helps solve not just national but global issues mentioned in the UN\u2019s SDG goals.<\/li>\n<li>Opens doors for investors to become international opportunists by contributing towards a problem\u2019s solution and becoming winners of the future.<\/li>\n<li>Helps stabilize and diversify a portfolio.<\/li>\n<li>Helps in meeting individual and organizational social responsibility.<\/li>\n<li>Enables investors to connect with big thinkers with bigger aspirations beyond monetary satisfaction.<\/li>\n<li>India, as a land of people, has many unsolved issues which can be solved through impact investing.<\/li>\n<li>Impact investing exists to heal the world, and if anything, this is something we all need to start working on \u2013 today!<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5431 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-1-e1641556014963.png?resize=800%2C471&#038;ssl=1\" alt=\"\" width=\"800\" height=\"471\" srcset=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-1-e1641556014963.png?w=2814&amp;ssl=1 2814w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-1-e1641556014963.png?w=1600&amp;ssl=1 1600w, https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-1-e1641556014963.png?w=2400&amp;ssl=1 2400w\" sizes=\"(max-width: 800px) 100vw, 800px\" data-recalc-dims=\"1\" \/><\/p>\n<h2>Cons of impact investing in India<\/h2>\n<ul>\n<li>It is a little risky to start investing in social funds due to the newness of the concept.<\/li>\n<li>The investor base for impact investments is still very niche, with only a few investment funds being able to achieve high results along with scalability.<\/li>\n<li>It is still tough to convince private investors to start putting their money into impactful funds, making the impact investing industry still a far-fetched dream.<\/li>\n<li>If it is a high return investment, it also is a high-risk one.<\/li>\n<li>Since impact differs across fields, it is tough to achieve measurement consistency.<\/li>\n<li>Impacts are tough to compare, measure and quantify.<\/li>\n<li>Impact investment trends in India in the year 2020-2021.<\/li>\n<li>The year of the pandemic, 2020, witnessed health care impact enterprises attracting 20 million U.S. dollars across 29 different deals.<\/li>\n<li>Impact enterprises in tech investments at the seed stage attracted the most growth, with most investors being interested in tech healthcare, tech, livelihood, and tech agriculture-based early-stage enterprises.<\/li>\n<li>Education impact enterprises gained $660 million in the year 2020-2021.<\/li>\n<li>Impact enterprises in agriculture attracted $440 million across 52 deals in FY 2020-2021, staying at the third topmost position of all investments.<\/li>\n<\/ul>\n<h2>Examples of impact investments in India<\/h2>\n<ul>\n<li>The Aavishkaar Group, focusing on development through entrepreneurship by aiming to develop an impact ecosystem in continents like Asia and Africa.<\/li>\n<li>Acumen, focusing on increasing small farmers\u2019 incomes.<\/li>\n<li>Elevar Equity, aiming at real-time adorability and value creation for customers along with optimal investments for entrepreneurs.<\/li>\n<li>Unitus Ventures, making seed-stage investments and startups that serve low-income populations.<\/li>\n<li>Omidyar Network, helping to create affordable and flexible financial products for small and marginal farmers along with regular Indians and businesses.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5432 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-2-e1641556245812.png?resize=794%2C843&#038;ssl=1\" alt=\"\" width=\"794\" height=\"843\" data-recalc-dims=\"1\" \/><\/p>\n<h2>Ideas to boost impact investment in India<\/h2>\n<ul>\n<li>Using telemedicine that connects urban doctors with rural patients to bridge the gap between the skill required in the medical field and its availability in hard-to-reach areas. Existing firms in the field: <strong>Karma Healthcare, Practo, Apollo, and more.<\/strong><\/li>\n<li>Leveraging green technology and putting it to much productive use by increasing renewable energy leads to green energy investments. Existing firms in the field: <strong>S4S technologies, Resham Sutra, and more.<\/strong><\/li>\n<li>Working on the financial inclusion of the vulnerable and rural populations through micro-financing NGOs, focusing on the credit and financial needs of the people in rural areas. Existing firms in the field: <strong>Shram Sarathi, Grameen Model Bank, and more.<\/strong><\/li>\n<li>Working towards, encouraging, and investing in impact firms that directly affect the pandemic situation in the country as of now, whether in the healthcare, food, and beverage, livelihood, or any other sector.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5433 aligncenter\" src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/impact-investing-1-3-e1641556472946.png?resize=751%2C900&#038;ssl=1\" alt=\"\" width=\"751\" height=\"900\" data-recalc-dims=\"1\" \/><\/p>\n<h2>Conclusion<\/h2>\n<p>Impact investing is definitely taking a plunge right now, and if done the right way, it is going to see immense heights in the coming time.<\/p>\n<p>It is definitely the need of the hour considering the depleting quality of the environment and only impact enterprises working with dedication to make a change in the world can change the game of how we survive along with what we earn.<\/p>\n<p>Impact investing is the real impact!<\/p>\n<p>You&#8217;d also like to read our guide on <a class=\"LinkSuggestion__Link-sc-1gewdgc-4 evyocv\" href=\"https:\/\/aayushbhaskar.com\/investment-advice-for-beginners\/\" target=\"_blank\" rel=\"noopener\">7 Crucial Investment Advice for Beginners<\/a> and <a class=\"LinkSuggestion__Link-sc-1gewdgc-4 evyocv\" href=\"https:\/\/aayushbhaskar.com\/best-investment-app-india\/\" target=\"_blank\" rel=\"noopener\">Top 5 Investment Apps In India for Beginners<\/a><\/p>\n<p><em>Let me know if you have any questions in the comments below.<\/em><\/p>\n<img src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png?w=800&#038;ssl=1\" class=\"ss-hidden-pin-image\" alt=\"\" data-pin-url=\"https:\/\/aayushbhaskar.com\/impact-investing-in-india-the-ultimate-guide\/\" data-pin-media=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png?w=800&#038;ssl=1\" data-pin-description=\"Impact Investing in India Explained\" data-recalc-dims=\"1\"\/>","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"<p>Impact investing has been not only the talk of the hour but also the need of the hour. With growing environmental concerns, it is essential that people start taking all the big and small steps that are needed to benefit it, somehow. One such method that investors and traders have taken up is impact investing, &hellip;<\/p>\n<img src=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png\" class=\"ss-hidden-pin-image\" alt=\"\" data-pin-url=\"https:\/\/aayushbhaskar.com\/impact-investing-in-india-the-ultimate-guide\/\" data-pin-media=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png\" data-pin-description=\"Impact Investing in India Explained\"\/>","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":4,"featured_media":5417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[185,186],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Impact Investing in India Explained - Aayush Bhaskar<\/title>\n<meta name=\"description\" content=\"Impact investing is a booming concept! Here is a guide that will tell you everything about impact investments.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aayushbhaskar.com\/impact-investing-in-india-the-ultimate-guide\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Impact Investing in India Explained - Aayush Bhaskar\" \/>\n<meta property=\"og:description\" content=\"Impact investing is a booming concept! Here is a guide that will tell you everything about impact investments.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aayushbhaskar.com\/impact-investing-in-india-the-ultimate-guide\/\" \/>\n<meta property=\"og:site_name\" content=\"Aayush Bhaskar\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-06T18:27:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-22T06:27:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/guide-on-impact-investing-in-India.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@FinAayush\" \/>\n<meta name=\"twitter:site\" content=\"@AforBhaskar\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"9 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5401"}],"collection":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/comments?post=5401"}],"version-history":[{"count":0,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5401\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media\/5417"}],"wp:attachment":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media?parent=5401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/categories?post=5401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/tags?post=5401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}