Core Characteristics of Impact Investing

The Core Characteristics of Impact Investing define the baseline expectations of what it means to practice impact investing. Providing this level of clarity to the market will help investors understand what constitutes credible impact investing and the Core Characteristics serve as a reference point for investors to identify practical actions they can take to scale their practice with integrity.

Four practices define impact investing.

The set of Core Characteristics below aims to provide clear reference points and practical actions to establish the baseline expectations for impact investing.

  1. Intentionality Impact investing is marked by an intentional desire to contribute to measurable social or environmental benefit. Impact investors aim to solve problems and address opportunities. This is at the heart of what differentiates impact investing from other investment approaches which may incorporate impact considerations.

  2. Use Evidence and Impact Data in Investment Design Investments cannot be designed on hunches, and impact investing needs to use evidence and data where available to drive intelligent investment design that will be useful in contributing to social and environmental benefits.

  3. Manage Impact Performance Impact investing comes with a specific intention and necessitates that investments be managed towards that intention. This includes having feedback loops in place and communicating performance information to support others in the investment chain to manage towards impact.

  4. Contribute to the Growth of the Industry Investors with credible impact investing practices use shared industry terms, conventions, and indicators for describing their impact strategies, goals, and performance. They also share learnings where possible to enable others to learn from their experience as to what actually contributes to social and environmental benefit.

These Core Characteristics of Impact Investing complement the GIIN’s existing definition of impact investments, which are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.


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