IMPACT INVESTING

Due diligence can also be undertaken for non-financial risks and in the field of impact investing such risks include whether the desired impact will be created.

“Impact investments are investments made into companies, organisations and funds with the intention to generate measurable social and environmental impact alongside financial return” (Global Impact Investment Network)

This type of due diligence can be undertaken pre-transaction, in order to assess whether the investment opportunity is aligned with the investors impact investment strategy; and post-transaction, when the impact is able to be measured and reported.

Such an evaluation can include an assessment of where in the business model the desired impact happens, who is benefiting, adverse or unforeseen impacts, and what impact the investment has achieved or is predicted to be able to achieve.