April 7, 2017

How to Identify High-Impact, High-Return Investment Opportunities

Impact investing is the new black

Impact investing has become a hot topic in the financial world, and understandably so.Clients are increasingly asking investors to not only focus on financial returns but to also consider environmental and social criteria when developing their portfolios. As a result, sustainable investing has been soaring, and nearly 26% of worldwide assets with a value of 22 trillion USD are now sustainable (an increase of 25% from 2014 to 2016).Impact investments can also yield greater financial returns. According to a 2014 study by the Carbon Disclosure Project, S&P 500 industry leaders that have a strong focus on mitigating climate change have a return-on-equity 18% higher and are 50% less volatile than those that don't.

Muddled waters ahead

The majority of investors are now using environmental, social, and governance (ESG) screening criteria to exclude investments with negative impact. A growing percentage, however, are taking an impact investing approach — targeting for-profit social enterprises, for example.Regardless of the strategy they follow, many note that they still struggle to identify potential investments that can deliver strong financial returns and create positive environmental and social impact.

How can the circular economy help?

The circular economy aims to achieve inclusive economic, social and environmental prosperity within the boundaries of our planet, by making efficient use of our resources. The concept is well aligned with the goals and intentions of impact investing. By applying elements of the circular economy to their evaluation criteria, investors can identify high-impact investment opportunities, improve the value of their portfolios, and minimise their exposure to the risks of linear business practices.To help investors evaluate their investments against the elements of the circular economy, Circle Economy’s Finance Program has developed a comprehensive suite of services that provide practical solutions for investors throughout the investment cycle. From lead generation to due diligence, our tools and services help investors identify promising investments that meet their financial and non-financial impact targets. After an acquisition, we help investors initiate change in the first 100 days and grow companies in the longer-term. We do this by working closely with investors and portfolio companies to identify actionable and value-generating strategies and interventions.Are you an investor looking for new investment opportunities that can create positive impact and deliver financial returns? Or are you hoping to transform your portfolio to create long-term value and impact?Find out more about our services for investors by downloading our investor brochure.

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