Contribute To Solutions: Impact
Example: investors can supply capital to underserved communities.
“I want to help tackle the affordable housing gap.”
Motivation: some investors are motivated to create positive change.
Investing method: impact investing—investments made with the intention to generate social and environmental impact alongside a financial return.
Outcome: periodic review to confirm assets channeled to underserved community are leading to tangible impacts.
The above process is known as the A-B-C Framework (avoid, benefit, contribute), which may help align investors’ motivations, investment methods, and expected outcomes.
Jason Hoody, CFA, is head of investment manager research and sustainable investing research at LPL Financial.