Impact Investing: How impact investing has an effect on poverty?

Impact Investing is the new hot buzzword in finance, but those who have been focused on sustainable finance for a while understand that it has been here for a greater time and has already made a tremendous impact on many different causes. Yet, as impact investing helps all these different causes, the one class that benefits that benefits the most is the one that has the most to gain: low-income households.

Environmentally

Low-income households suffer the most from our environmental woes as they have the least resources to counter the effects. For example, the rising use of air conditioning because of rising global temperatures makes life more difficult for those in lower-income households. However, impact investing, which is investing in companies whose causes will positively impact the world, can help counter this as they can support companies looking to tackle environmental woes either by reducing their contribution or by providing a solution. As these companies can better fulfill their environmentally sustainable goals because of their support from impact investing, low-income households feel the effect and benefit.

Socially

Like environmentally, low-income households suffer the most from our social issues as they tend to be excluded from jobs or opportunities that allow social mobility and financial freedom. An excellent example is the initiative by large banks, such as JP Morgan Chase and Morgan Stanley, to provide resources, opportunities, and programs to uplift poverty-stricken individuals into the field of finance to reduce economic hardship and discrimination. Impact Investing supports the investment of these companies looking to positively impact the world socially. Thus, impact investing has the opportunity to uplift those in lower-income households.

Conclusion

Although impact investing is focused on directly solving specific glaring issues in our world, its impact ultimately serves the people and uplifts those who suffer from the issues. As individuals who suffer the most from these issues, low-income households have the most to gain from impact investing.