What is Impact Investing?
Impact investing refers to the placement of capital in enterprises or vehicles that are designed to generate social and environmental impact as well as financial return. Impact investment opportunities exist across all sectors, including affordable housing, health care, education, clean tech, microfinance, food, farm, forestry, and green infrastructure.
Impact investments can vary widely with respect to geographical focus (from hyper-local to international) and investment characteristics (ranging from community development notes to direct equity ownership). At Clean Yield, we focus on two types: community investments and alternative investments.
Clean Yield has facilitated impact investments worth over $14 million, invested on behalf of more than 55 clients in over 30 impact investment offerings.
Community Investments are debt instruments that tend to be lower risk, offer lower returns, and are more flexible and liquid than alternative investments. In most cases community investments are open to all investors.
Alternative Investments are non-community investment funds and direct private-placement investments of a variety of forms from debt to equity to convertible debt. Alternative investments tend to be higher risk, more illiquid, and provide a higher return than community investments. They are available only to accredited investors.
Impact Investing at Clean Yield Asset Management
Clean Yield began investing in community investments notes in 2000. We played a key role in getting Calvert Community Investment Notes on a variety of custodial platforms, thus making them more accessible to a wider group of investors.
We made our first direct-placement impact investment in 2007 in Organic Valley, the Minnesota-based cooperative whose member-owners stretch all the way to Vermont. In that year, we also made our first local impact placement investment in Vermont’s High Mowing Seed Company. Today we have facilitated impact investments worth over $14 million, invested on behalf of more than 55 clients in over 25 impact investment offerings.
“I felt that this [High Mowing Seeds] was a rather perfect investment for many of our clients, particularly since I could keep a very close eye on it. I also felt that it was the kind of investment that would appeal to our clients’ desire to support and invest in securities that supported local communities and sustainability.” ~ Rian Fried, 2012