There’s a lot of talk on impact investing these days and I’ve been involved in my fair share of these discussions. Impact investing has excited a lot of people. But what exactly is impact investing and what’s been its track record? Wikipedia defines impact investing as investments “made into companies, organisations and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.” Impact investing is, therefore, this nebulous phrase that can cover nearly everything. I spent 8 years investing in infrastructure in India and strongly believe that building roads that connected villages and towns to larger markets is impact investing. And so also with building power plants and better airports. Similarly, the Tata’s building of the steel plant in Jamshedpur was impact investing and so was Reliance’s building of the Jamnagar refinery. And so also is Tesla’s investing in the electric car. These investments were primarily capitalist in nature, but their impact on society has been and will continue to be enormous.

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