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Opinion

Impact investing: don’t sweat the small stuff

Arguments over the definition of impact miss the point in a rapidly growing market.

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A few weeks ago, a young friend recently graduated from university proudly told me that she had started impact investing.

She is saving £30 a month via Tickr, a new mobile investment platform, and is – she believes – making a difference in areas from climate change to gender diversity. She is not the only one.

Since Tickr was launched in January 2019, it has signed up more than 100,000 customers in the UK. Most are young – the average age is 31 – and half are women. Nearly all are investing for the first time.

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The only problem is that Tickr, at least in its current incarnation, bears little resemblance to what most in the investment world would understand as impact investing.

According to the Global Impact Investing Network, this requires that investments are made “with the intention to generate positive, measurable social and environmental impact alongside a financial return.”

In practice, this means investing in firms whose products or services make a positive impact on society or the environment – in other words, wind turbine manufacturers, sustainable food producers, electric vehicles and the like.

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