Impact Alpha: Driving Financial Value with Impact

Many investors choose impact investing because they want to support companies making a positive difference in the world. They are motivated by the desire to align their investments with their values. Other investors, however, avoid such investments due to concerns about the financial ramifications.

It is a common myth that impact investments sacrifice financial returns. Most studies, however, have found no evidence that socially responsible or impactful investments lead to lower financial returns. In fact, an annual investor survey by the Global Impact Investing Network found that the majority of respondents achieved market-rate returns, with 91% reporting that returns met or exceeded expectations.

Incorporating an impact objective can actually improve financial performance. Consumer demand, and in turn expenditures, for impactful products and services is increasing. Moreover, new technologies have the power to tackle many of the world’s most pressing challenges and continue to experience significant growth. Sustainable, impactful companies also attract talented employees. These factors, among others, contribute to successful businesses that drive financial value for investors.

Consumers Demand Innovative, Impactful Products and Services

As consumers become more socially conscious, demand for products and services that create positive change is accelerating. For instance, people around the world are increasingly interested in taking care of themselves, and the wellness sector is a fast-growing market. Natural products, smart wearable devices, and mindfulness are examples of growing industries within this sector. Demand for sustainable food systems has increased as a result of both health concerns and growing awareness that our natural resources simply cannot sustain the way we currently eat. Renewable and efficient energy is another example as clean energy is arguably the fastest growing “green” sector.

COVID Presented New Business Opportunities

COVID-19 changed many aspects of daily life, including, for example, the ways we learn and take care of our health. The pandemic presented new investment opportunities in healthcare as innovative technologies such as digital health and virtual care were adopted at accelerated rates. EdTech (education technology) was brought to the forefront as schools were forced to adapt to the crisis by implementing new digital strategies and finding ways to virtually support diverse students.  Even as COVID-19 moves from a pandemic to an endemic, demand for new technologies that improve societal outcomes continues to increase.

Impactful Companies Attract Talent

Top quality employees continue to gravitate to businesses that have a social and environmental purpose in addition to profits, driving innovation and growth at leading companies. Amplified by the Great Resignation, employees are leaving companies not aligned with their values and seeking positions at others that are more sustainable, equitable, and purpose-driven. Impactful companies will continue to attract talented and engaged employees as more members of Gen Z enter the workforce. Gen Z feels strongly about climate change and social issues, and Gen Zers want their work to be meaningful.

Evidence of Impact as Alpha

  • 71% of Gen Zers would take a pay cut to do meaningful work, and 43% Gen Zers say that one of their long-term career goals is to make the world a better place[1]
  • 68% of people are more likely to accept positions from environmentally sustainable companies[2]
  • Teams of diverse startup founders create 63% better valuations than all-male, all-white teams[3]
  • 77% of people want to make more sustainable choices in their homes[4]
  • There is an estimated $165-$255 billion to be made in meeting the increasing food requirements of those emerging out of extreme poverty, $155-$405 billion in reducing food waste in the value chain, and $110-$205 billion in re-formulating products for increased nutritional value[5]
  • The market for online degree-focused higher education is expected to more than double in value to $74 billion by 2025.[6]
  • Investment into augmented reality and virtual reality solutions in education is expected to grow from $1.8 billion in 2018 to $12.6 billion by 2025, and expenditure on robotics in education is expected to increase from $1.3 billion in 2018 to $3.1 billion[7]
  • According to McKinsey & Company, disruptive healthcare technologies that expand and optimize service delivery while lowering cost will gain mass adoption[8]
  • Companies that unlock services for underserved populations will create and dominate new markets for healthcare service delivery[9]
  • Green electricity is on track to become the largest power source in 2025, displacing coal, which has dominated for the past 50 years[10]
  • The International Finance Corporation estimates a climate investment opportunity of $24.7 trillion in green buildings[11]




















Investments in securities involves the risk of loss. Any mention of a particular security and related performance or impact data is not a recommendation to buy or sell that security. The information provided in the Uplifting Capital newsletter, podcast, social media channels or the website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information.