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Understanding impact investing

Understanding impact investing

Understand the common terms of impact investing and what they mean by using our lexicon.

Ruth Lawrence

Head, Global Impact Investing Institute

KPMG Australia


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Impact investing is a rising force in the global economy and has significant potential for growth. Impact investing programs can be applied in a variety of settings to achieve various outcomes and can come in different forms. When approaching the market, it is important to understand that impact investing is a broad term that encompasses many investing mechanisms and a broad range of technical terms.

To help understand this new vocabulary, we have prepared a lexicon. This short summary of key terms should help you understand the difference between a green bond and a blue bond, and to tell a DIB from a SIB, for example. It is our hope at KPMG that this lexicon can contribute to a better understanding of how impact investing works.

We firmly believe in the power of enlightened, forward-thinking investment to improve social and environmental outcomes. Whether it is an investor applying the principles of responsible investing, a company taking steps to create long-term value for society, or through the careful design and implementation of scalable programs that have positive societal benefits, impact investing tools can be applied. 

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