This article provides general information and should not be interpreted as financial advice. For personal advice, consider consulting a licensed financial professional.
There’s another kind of social anxiety, not so much centred around how to avoid speaking to people you work with in wine bars, but more about the disintegration of actual society and the rules-based order, the dismantling of the post- war consensus, species- threatening breakdown of the climate, and the erosion of human rights. All of which can help take your mind off the fact that you don’t like anyone you know, and give you a new focus- what are we all going to do about these massive problems?
As your grandmother said, money may well be the root of all evil, and certainly the version of capitalism we are living through isn’t exactly working, but it can also do an awful lot of good. Cash can change lives. Each dollar can do double duty- build wealth and build a future.
Which brings us to impact investing.
The movement has gained momentum, weaving together financial returns and measurable social or environmental outcomes, and shifting the conversation from “How much can I make?” to “How can I make money and not dig our collective grave at the same time?”
Irresistible will be publishing illuminating interviews about the future of money with the economist Bob Costanza, and the manager of a large social impact fund in Singapore in the coming weeks, but we have started by sitting down with John Hromin. He describes himself as a dedicated long time student of financial markets. We describe him as an irresistible guru, who has spent considerable time and money re-imagining what investments can achieve.
One kind of social impact investing is having a blow- dry before a party. Is Social Impact Investing something else?
“Impact investing is an investment strategy that aims to generate positive, measurable social and environmental impacts alongside financial returns. It differs from traditional investing in that it explicitly seeks to address societal challenges, such as climate change, poverty, sustainable agriculture, education, healthcare, and equality through the allocation of capital.
For some, social impact investing might seem like a newer, shinier way to talk about ethical investing. But it’s not just about avoiding “sin stocks” like fossil fuels or tobacco. It’s about actively choosing to put money into ventures that solve the world’s biggest problems.
This approach—where the measurement of success is intertwined with impact—defines social impact investing. It’s not about sacrificing financial returns; it’s about finding the sweet spot where profit and purpose intersect.”
In this day and age social impact is largely measured with insta likes. Is there a better way in the social impact investing space?
“For an industry that’s still solidifying its identity, impact investing is full of questions. How do you measure success? What frameworks can you trust?
That’s where the IRIS+ system comes into play. Developed by the New York based Global Impact Investing Network (GIIN), IRIS+ is like a universal measuring stick for impact investors. It sets metrics for tracking the outcomes of investments: how many jobs were created, how much carbon dioxide was saved, how many people gained access to clean water, and even how many children gained access to healthcare.
But it’s not just about tallying numbers. It’s about speaking the same language. It’s standardised. It’s easier to compare different investments and see if they are truly making a positive difference. Investors can report clearly to stakeholders on both the financial and social returns of their investments. Essentially, it brings consistency and clarity to how impact is measured. When investors, organisations, and stakeholders use the same metrics, it builds trust, transparency, and accountability.
It’s not enough to say a project did good. Investors want proof. They want data. And they want to see that their investments are creating tangible change.”
Is there a good example of impact measurement and reporting that you’ve come across?
“I really love the example of the Grameen Bank in Bangladesh. It was founded with a clear mission: to lift people out of poverty, one microloan at a time. Their target was small entrepreneurs who were shunned by traditional banking—mostly women, often mothers and in rural areas—who needed just a small amount to transform their lives and the lives of their children.
For Grameen, it’s success is about returns but it’s also about the number of businesses started, the rise in women’s financial independence, and the ripple effect on their families and communities.
2. Entrepreneurial Growth: They measure the number of businesses started or expanded using the loans, as well as how many jobs were created in local communities.
3. Poverty Alleviation: Grameen also monitors the social impact by tracking the percentage of borrowers who move above the poverty line, with significant success in lifting millions out of poverty.
4. Empowerment of Women: Since the majority of borrowers are women, the bank tracks the increased financial independence, improved education, and healthcare outcomes in the families of these borrowers.
What about if you’re not a billionaire or have a tonne of other people’s money to throw around. Is there impact investing that anyone can get into?
“The good news is impact investing is now accessible. Traditionally, impact investing was the domain of high-net-worth individuals, large institutions, and philanthropic foundations. Inherent in these pipelines are issues of oversight and democracy, corruption, tax avoidance and good old fashioned money laundering. Crowdfunding platforms like Kiva and SeedInvest are built on the principles of transparency and social change, and allow even the smallest investors to get involved. One hundred dollars might not seem like much, but when pooled together with thousands of others, it can become seed money for a new renewable energy startup or provide clean water systems for communities that have never had access before. It’s a way of democratising impact investment, not just leaving it to the few.
Kiva, for example, doesn’t require large amounts of capital, investors can choose from a variety of sectors and regions, allowing them to align their investments with their personal values. it has direct impact by funding specific projects or entrepreneurs, so investors can see the direct effects of their contributions on real people’s lives. The fund also fosters a sense of global community and connection, as investors can interact with and follow the progress of the borrowers they support.”
What about the cynics. What about those who say we just have to wait for trickle- down economics from the 0.0001%?
“Despite the growth of the sector, there’s still a lingering misconception that social impact investing means lower returns. In reality, the picture is much more complex. Yes, sometimes impact investments may yield slightly lower financial returns compared to high-risk ventures. But in many cases, long-term sustainability and strong social outcomes are directly linked to better financial performance. Take the renewable energy sector as an example. As the world shifts away from fossil fuels, early investors in solar and wind energy are seeing both high returns and a positive environmental impact.
Finding that balance is key. You’re looking for projects where social impact and financial health reinforce each other. It’s also about rethinking how we evaluate success. If a project is empowering communities or reducing environmental harm, isn’t that an additional return on investment?
What are ETF’s and what have they got to do with saving the world?
“As everyone is hopefully now aware, the sector is changing, and another innovation in the space is Impact Exchange-Traded Funds (ETFs).
Exchange-Traded Funds, or ETFs, are investment funds traded on stock exchanges, much like individual shares. Unlike traditional mutual funds, ETFs can be bought and sold throughout the trading day, giving investors flexibility and often lower fees. They pool investments from multiple sources. Impact ETFs are a specific type of ETF that targets investments in companies with strong Environmental, Social, and Governance (ESG) credentials. This means that these funds are focused not just on financial returns but on achieving the kind of measurable, positive impacts we’ve been talking about, in areas like environmental sustainability, social responsibility, and ethical governance.
Everyday investors can get involved, no deep pockets required. And neither is a deep knowledge of each company’s ESG performance. iShares, Vanguard and BetaShares, are three amongst a growing throng of platforms that offer an array of Impact ETFs, where an investor, however small, can focus on the things that matter, like clean energy, gender equality, and sustainable water use.”
1. HESTA is a leading super fund focused on health and community services, has been a strong advocate of impact investing. It has committed to investments in affordable housing, renewable energy, and social enterprises. HESTA’s Social Impact Investment Trust, which targets investments that create jobs, reduce inequality, and support sustainable communities, is one of the most prominent examples in the space. HESTA has seen success through projects like the Housing First initiative, which provides permanent housing for vulnerable populations. This investment offers social impact by addressing homelessness and has been financially viable, delivering returns in line with market expectations.
2. Australian Ethical Super is a pioneer in ethical and impact investing, managing funds specifically directed toward positive environmental and social outcomes. The super fund has invested heavily in renewable energy, sustainable agriculture, and healthcare. Australian Ethical investments in clean energy, including large-scale solar projects, have delivered strong financial returns while significantly contributing to Australia’s renewable energy transition.
- Australian Ethical
- AustralianSuper
- Aware Super
- CareSuper
- Cbus Super
- Future Super
- HESTA
- Rest
- Telstra Super
- UniSuper
Irresistible’s top tips for next steps to make an Impact. Find your category!
- if you’re going to get into impact your staff are going to have to be on board. set some ethical tests for your fund managers/ private office team. if they fail, fire the lot of them and get new ones.
- give all your money away you shouldn’t exist anyway.
- put all your money from your spaceship designs and cray cray bunker schemes into starting your own social impact fund. get all your billionaire mates to join in.
- switch your super to one that’s focussing on impact, and start using investment platforms where you can invest ethically, and encourage anyone you know to do the same.
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hire a licensed expert who can advise your whole company on how to make a difference, while making a return, and without becoming accidental greenwashers.
- try and persuade the billionaires you work for to follow the billionaire rehabilitation steps above.
- marry a billionaire
- microinvest on crowdfunding platforms so even your small contribution can make a difference.
- don’t call yourself unemployed- you’re economically inactive by choice- and using your time in the centrelink queue to invent something that will make your fortune and save humanity at the same time. no doubt an irresistible reader will be the one to come up with once in a multi-generation new economic model.
- also, don’t panic- money doesn’t really exist anyway!
What started as a niche sector is becoming mainstream, and that’s a good thing. It’s a reminder that money, for all its flaws, can be a tool for transformation. As the saying goes, you vote with your dollar. And right now, more and more people are casting their votes for a future where profit and purpose walk hand in hand.
It’s essential to note that all investments carry risks, even those with positive impacts. As with any investment, impact investing involves risks, and returns are not guaranteed. Past performance is no prediction of future performance and this article is general in nature and is not intended as a recommendation of any particular investment strategy or product.
