By Chinenye Uwanaka BL, LLB, ACI.Arb (U.K), IPP (Harvard), Nathaniel Ojobo BL, LLB, ACI.Arb (U.K) and Sandra Chude B.sc, LLB, BL, LLM
1. DEFINITION OF THE CONCEPT
Impact investing is the allocation of assets (in the form of investments) into companies or organizations with the aim of bringing about positive social or environmental impact while also anticipating profit from such investments. Impact investment challenges the long-held view that social and environmental issues should be addressed only by philanthropic donations and that market investments should focus exclusively on achieving financial returns.
The strategy actively seeks to make a positive impact by investing, for example, in nonprofits that benefit the community or in clean-technology enterprises that benefit the environment. Impact investing can create significant value for investors and society as a whole. Impact investing attracts individuals as well as institutional investors including hedge funds, private foundations, banks, pension funds, and other fund managers.