Whether you’re new to the world of investing or a seasoned pro, the pure amount of acronyms and jargon in the investing world can be overwhelming. At Invested Interests, we like to dispense with the jargon and get down to the basics of how and why you’d like to invest. We understand that investing is a deeply personal decision, and we’re here to help you cut through the confusion.
With that said, with the rise of impact investing, there’s an entirely new set of acronyms and terminology out there. If you’re looking to learn whether or not impact investing is right for you (or even what it is!), we’ve put together a little dictionary below:
Impact Investing (II): Though it may not technically have an “ii” acronym by everyone else’s standards, it does seem to fit here at Invested Interests. Coincidentally, those are our two favorite letters as well. Impact investing refers to investing in funds, companies, or organizations in order to make a social impact as well as a financial one. There are many types of social impacts and social divestments (choosing to not invest in a cause) that investors can choose from including investing in the environment, diversity, peace, and human rights.
Socially Responsible Investing (SRI): Often used interchangeably with impact investing, socially responsible investing involves utilizing your assets along with other socially conscious investors to promote positive change. The acronym can also be used to suggest Sustainable – Responsible – Impact incorporating the desires of investors.
Responsible Investing (RI): This concept has somewhat shifted with the investment landscape in recent years. Previously only open to large and wealthy investors, responsible investment opportunities gave grown in both sophistication and numbers. Investing responsibly is no longer associated with making only smart investment choices, but making investment choices that are responsible in terms of sustainability and positive impact.
Environmental, Social and Governance (ESG): The acronym ESG is used far more than it’s full name which standards for a set of criteria that are used to screen companies for sustainable practices and ethical implications. The three main types of social criteria impact investors focus on are typically related to environmental, social and corporate governance issues.
Corporate Social Responsibility (CSR): A type of business self-regulation that both small and large companies participate in to judge their impact on the environment around them. A broad term, CSR, differs vastly based on industry but can include such issues as increasing volunteer efforts, monitoring and evaluating internal HR practices, and reducing carbon footprints.
Global Impact Investing Rating System (GIIRS): Pronounced “Gears”, the GIIRS is a rating system applied to both companies and funds that allows impact investors and fund managers to evaluate social impact.
Questions about socially responsible investments or wondering if it’s the right investment move for your future? Request a FREE impact investment consultation, and we’ll be in touch!