Gil Crawford, CEO of MicroVest, an impact investing asset manager based in Bethesda, Md., recalls a loan officer relating a story to him about a group of women gathered in a town square in a small town in El Salvador a decade ago.

The loan officer was asked if he could tell which women were there for their first loan and which were returning for second or third loans to keep their successful small businesses going. When he said no, he was told the women who had school-aged children with them were there for their first loan. Those without children had profitable small businesses and could afford to send their kids to school.

That is the kind of difference impact investing can make in the lives of people who would otherwise be struggling, Crawford said. MicroVest works in emerging and frontier countries to facilitate loans provided by investors, people who not only want to help the community and the world but expect a return on their money. (Frontier countries are those that are even less economically developed than emerging economies.)

Impact investing is only one of the investing options for those who want to “do good” with their investment dollars. Among the labels put on this growing field of investing are “impact investing,” “ESG” (for environmental, social and governance) and “SRI” (for socially responsible investing or sustainable, responsible impact investing), a field that promotes companies affecting communities positively and avoids those companies with more troublesome records.

The words and acronyms mean different things to different advisors and investors, but everyone agrees that the overall sustainable investing field is growing by leaps and bounds. “The language of ESG is evolving, but it is still an alphabet soup,” says Brie Williams, head of practice management for Global SPDR Business at State Street Global Advisors in Boston. “We need to standardize the language to help clarify the conversation. If advisors use language more deliberately, it will help the clients.”

Andrée Simon, president and CEO of FINCA Impact Finance, a microfinancier for people who do not have access to banking facilities (known as the “unbanked”) warns that in some cases impact investing through small loans can be highly risky, but it can also pay returns that exceed the stock market.

“Impact investing in these types of ventures is highly uncorrelated to the stock market,” Crawford adds. “The due diligence process at MicroVest allows us to discover investments that others are not finding and that can offer risk-adjusted returns. Lending to the poorest people in the world can give you good diversification.”

According to US SIF, the Forum for Sustainable and Responsible Investment, SRI investing grew by a third between 2014 and 2016 to $8.72 trillion in investments, representing one out of every five dollars under professional management in the United States. The 2018 report is now being compiled. The Global Sustainable Investment Alliance put the worldwide number at $23 trillion in 2016.

According to Schroder Investment Management’s “Global Investor Study 2017,” more than half (52%) of U.S. investors now “often” or “always” invest in sustainable funds, which is above the global average of 42%. Despite the growing interest, particularly among women and millennials, and the vast amount of money that is being transferred to younger generations, there are still two major gaps in this segment of investing. Advisors are not approaching clients about the possibilities, and investors are not acting on their stated desires, says Theresa Gusman, chief investment officer for the First Affirmative Financial Network, a Colorado Springs, Colo., firm specializing in sustainable investing.

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