ESG Is Not Impact Investing and Impact Investing Is Not ESG

In Standford Social Innovation Review article, author Jaclyn Foroughi helps readers understand six important differences between ESG and impact investing to ultimately help channel funds appropriately and facilitate better conversations. Foroughi writes, “Too often, ESG is confused with impact investing, which obscures the enormous efforts of the impact investing space. Understanding the difference not only facilitates better-informed conversations but helps channel funds appropriately and further amplifies the progress of the sector toward achieving the audacious Sustainable Development Goals (SDGs) by 2030. There is little doubt that the future of both business and finance incorporates social and environmental considerations. At the same time, the symbiotic relationship between these benefits and financial performance ensures the sustainability of purpose-driven organizations. Having the knowledge to differentiate between what lies in the past and what is part of our future is essential in ensuring the success of our people and planet.”