Interest is growing in impact investing–investing that supports environmental, social and governance (ESG) goals, while also earning a return.  “Interest has spread to top-tier investors who understand the alignments between positive ESG results and financial returns,” says Susan Mac Cormac, a partner at Morrison & Foerster.  Key factors for entrepreneurs to consider:

  • Impact investors will gauge your performance–and that of your suppliers–in areas including water and energy usage, training, and employee turnover.
  • Even if your performance isn’t optimal, they might invest if you are considering operational and management changes that could strengthen your ESG position.
  • Investors will want to know how you track and report your ESG performance.
  • Some “pure” impact investors will only invest if your primary purpose is “doing good” as opposed to merely mitigating the negative impacts.