The opinions expressed by Entrepreneur authors are their very own.
As the world becomes more connected, it also becomes more aware of the impact of actions on the climate. Sustainability is a core value among Gen Y and Gen Z consumers, who make up the majority of today’s purchasing power across all industries. By investing in corporations committed to making changes, you can ensure that your money will likely be invested in a brand that can have above-average value in the customer’s life, and subsequently, a much longer period of revenue growth.
As CEO of Idoneus, I have witnessed first-hand the transformative power of adopting a contributing mindset. Today’s market is evolving so quickly that values equivalent to social responsibility and sustainability are of paramount importance. It is equally essential to understand the dynamics of impact investing.
Today’s buyers want to know that the brands they support are making a positive impact. According to Harvard Business Review27% of Gen Y and Gen Z buyers are more likely to support a company if they consider it cares about the planet and people. HBR further highlights that sustainability demands are increasing, which ultimately increases trust, engagement and conversions.
In this text, I’ll delve into the principles of impact investing, discuss the many ways decision makers can make a contribution beyond financial investments, and explore the values that guide each Millennials and Generation Z.
Why you need to understand impact investing
As I’ve learned, impact investing is one of the strongest forces in finance. It not only bridges the gap between purpose and profit, but also works by leveraging capital to generate measurable environmental and social impact. Sustainable business models are now not just a fad; they represent the true way forward for investing. Additionally, aligning your investments with your core values will allow you to make positive changes while increasing financial returns for your stakeholders.
Values that are most significant to Millennials and Generation Z
There is little question that each Millennials and Gen Z make up the majority of our consumer market. Together they constitute over 3 billion people on our planet and include 50.7% of the US population. Both demographics prioritize their core values, including social responsibility, sustainability and finding ways to make a real difference in the world. These generations are more likely to support your enterprise, especially if it shares the same values and contributes to the causes they care about most.
As a result, deeply understanding and finding ways to align with their core values is essential for businesses and investors. We all the time strive to prioritize investments in ventures that reveal an ongoing commitment to social impact, ethical business practices and environmental sustainability.
Looking beyond financial investments
While making smart investments is essential, their real impact goes far beyond monetary transactions. At Idoneus, we advocate giving back in many ways. These include providing ongoing mentoring to emerging entrepreneurs, offering our expertise in specific areas and taking the time to build real, meaningful relationships with all our stakeholders. We use our resources, influence and expertise to support positive change not only in our community, but around the world.
Stay authentic and transparent
In today’s business landscape, authenticity is a top priority. Consumers, stakeholders and financial investors expect honesty and complete transparency from the corporations they support.
Nielsen IQ Report shows that 81% of consumers consider transparency “important or extremely important.” I all the time prioritize transparency in my activities, from investment strategy to creating effective measurement practices. I consider that true contribution can’t be faked – it is about aligning my actions with values that reveal my commitment to change. If you’re wondering how to increase customer engagement, consider whether you’re transparent about the intricacies of your organization and its mission.
The way forward for impact investing
As the investing and wealth-building landscape evolves, the need for impact investing will increase. We are committed to selecting the causes that matter most and investing in a way that is consistent with our core values. We not only create value for our stakeholders, but also contribute to a fairer and more sustainable future overall.
See if your organization can implement a giveback practice or allocate a percentage of revenues to a specific mission – or consider creating a philanthropic arm or foundation to ensure your work leaves a positive legacy. Consider whether the causes you support have the infrastructure built in to make sure that invested capital reaches its destination as intended.
Taking the time to adopt a contributing mindset is definitely one of the best ways to succeed in today’s socially conscious marketplace. Whether you are an entrepreneur, investor or CEO, truly understanding the basic principles of impact investing and learning how to align your actions with your values will lead to long-lasting, impactful results.
I’m proud to lead by example, showing that regardless of how unattainable it could seem, it is 100% possible to increase your return on investment while making a difference in society and the environment. By working together, it is also possible to create an much more sustainable, not to mention equitable, future for future generations.