Definitions of Impact Categories
Based on G8, World Economic Forum, and GIIN impact categories:
Non-Impact: These investments follow the traditional investment approach with an emphasis on profit maximization without any explicit or intentional regard for social and/ or sustainable factors or externalities.
Responsible/SRI Investments (Responsible): “Responsible” involves the negative screening of investments due to conflicts or inconsistencies with personal or organizational values, non-conformity to global environmental standards, adherence to certain codes of practice, or other such impact performance criteria.
Sustainable/ESG Investments (Sustainable): “Sustainable”investments move beyond a defensive screening posture and are actively positioned to benefit from market conditions by integrating environmental, social and governance (ESG) factors into core investment decision-making processes.
Thematic Investments (Thematic): “Thematic” (also known as Mission) investments have a particular focus on one or more impact themes, such as clean energy or access to clean water. These are highly targeted investment opportunities in which the social and/ or environmental benefits are fully blended into the value proposition of a commercially positioned investment.
This category also includes, but is not limited to, investments that seek to optimize a desired social or environmental outcome, without regard to competitive return. These investments may trade off financial return for greater impact where a more commercially oriented return is not yet available. When practiced by US private foundations, there is the option to consider this a Program-Related Investment (PRI), as defined by US tax law.