Impact investing: What investors need to know

The rise of impact investing is notable in Europe. More investors are looking not only for financial returns, but also for measurable positive contributions to society and the environment. In this blog post, we will explore the fundamentals of impact investing, how it’s implemented at Invesdor, notable impact cases, and the integration of ESGs (Environmental, Social, and Governance) and SDGs (Sustainable Development Goals) in Invesdor’s approach.

What is impact investing?

Short answer: Impact investing is about putting capital into companies and projects that aim to generate measurable social and environmental impact alongside a financial return. It does not guarantee higher returns than traditional investing, but it allows investors to align part of their portfolio with causes such as clean energy, circular economy and access to healthcare.

Impact investing should not be mistaken for charity. Impact investing is a financial strategy that aims to generate positive, measurable social and environmental impact alongside a financial return. Unlike traditional investing, where the primary focus is on maximizing profits, impact investing intentionally targets investments that address global challenges such as climate change, poverty, and inequality.

Impact Europe declared in November 2024 that the European private impact investing market has reached €190bn. At Invesdor we can see that the interest from private investors to choose impact investment opportunities is on a steady rise across all markets.

How you can do impact investing at Invesdor

Invesdor is one of the leading impact investment platforms in Europe, that offers opportunities for individuals and institutions to invest in impactful cases and benefit financially while doing good. By connecting investors with innovative companies that align with ESG principles and contribute to the SDGs, we facilitate investments that support sustainable development. Learn more about how we implement ESGs and SDGs.

What to look for on Invesdor’s platform

• Look for the Impact Investment -label on the funding round’s presentation page.
• Look at the Impact listed on the project presentation page. We show you on the funding round’s presentation page which SDGs the company is contributing to.
• Choose funding rounds that align with your investment strategy and causes that are important to you, whether it be green energy, combating water scarcity or recycling waste materials to new purposes.

Impact funding rounds at Invesdor

Invesdor has had several impact funding rounds over the years. The ESGs and SDGs are important and are considered a central part of the due diligence process.

ESGs and SDGs are at the core of Invesdor’s funding round selection process

Invesdor’s impact investing framework is deeply rooted in ESG and SDG principles.

ESG Integration: All funding rounds listed on Invesdor undergo evaluation based on environmental, social, and governance criteria. This ensures that investments align with sustainable practices and ethical governance standards.

• Environmental: Projects are assessed for their impact on reducing emissions, promoting clean energy, and conserving resources.
• Social: Investments target initiatives that promote community well-being, equality, and social justice.
• Governance: Companies are evaluated for transparency, accountability, and ethical management.

SDG Alignment: Invesdor aligns its investment opportunities with the United Nations’ Sustainable Development Goals. For example:

• Windpark Friesland contributes to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).
• E-Heat supports SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption and Production).
• RiverRecycle advances SDG 14 (Life Below Water) and SDG 12 (Responsible Consumption and Production).

What investors need to know

Impact investing offers a powerful way to align financial goals with a desire to make a difference in the world. At Invesdor, investors can access a range of impactful opportunities, from clean energy projects to innovative waste management solutions. With a focus on ESG criteria and SDG alignment, Invesdor provides a transparent and purpose-driven platform for sustainable investments.

Impact investments are still investments: they carry risk, including the possibility of losing part or all of the capital invested. Many impact projects are early-stage or growth companies and their securities can be illiquid. Past impact or financial performance is not a reliable guide to future results.

By choosing impact investing, you’re not only pursuing financial returns but also contributing to a better future for our planet – this is what we call double return.

Impact investing – frequently asked questions

Is impact investing guaranteed to deliver higher returns?

No. While some impact strategies have delivered competitive returns in certain periods, there is no guarantee that they will outperform traditional investments. Financial returns depend on many factors, including the specific project and market conditions.

Is impact investing the same as ESG investing?

Not exactly. ESG integration focuses on including environmental, social and governance factors in risk and opportunity analysis. Impact investing goes a step further by intentionally targeting measurable positive outcomes alongside financial returns.

Can I start impact investing with small amounts on Invesdor?

Yes. Through Invesdor, you can participate in selected impact-oriented funding rounds with relatively small minimum investments, typically from around a few hundred euros, depending on the project.

How does Invesdor decide which projects get the Impact Investment label?

Projects with the Impact Investment label have been evaluated for their contribution to at least one UN Sustainable Development Goal and for the relevance of their ESG factors. This assessment is part of Invesdor’s due diligence process, but it does not remove the investment risks.

Disclaimer: This article is for general information only and does not constitute investment advice or a recommendation to invest in any specific project. Investing in securities and crowdinvesting projects involves risk, including the possibility of loss of capital invested.