What is impact?

A clear view on impact investing

Recommended reading: NorNABs guide to impact investments in Norwegian.

Go to guide

"Impact investments are investments made with the intention to generate positive, measurable social and/or environmental impact alongside a financial return."

- The Global Impact Investor Network (GIIN)

Core Characteristics

Impact investing integrates both strategy, tactics, and methodologies. It embodies a holistic approach that connects to its core characteristics. Each of them deepens the commitment to making a meaningful impact through each investment decision.

Intentionality: The hallmark of impact investing is its focus on intentionality; the investments are made with the explicit goal of generating positive outcomes.
Use of Knowledge and Data: Investors utilize a blend of qualitative and quantitative data to analyze and increase the impacts of their investments.
Impact Management: Every investment is made with a clear purpose, focusing on achieving specific social and environmental goals.
Contribution to the Growth of the Impact Industry: Impact investors play a crucial role in developing the market by practicing transparency and adopting standardized practices and metrics.
Additional Characteristic: Investor Contribution: This characteristic explores whether an investment creates a change that would not otherwise occur.

Impact investing creates a world in which we no longer have to choose between doing good and doing well. It demands that we do both.

Sir Ronald Cohen
President, GSG Impact

Unpacking myths and misconceptions

Impact investing has gained traction over recent years, but several myths and misconceptions continue to cloud its understanding. Here we address a few of the most common ones.

Impact Investing Necessitates Sacrificing Financial Returns

Some believe impact investing comes at the expense of financial performance. However, reports from institutions like the GIIN and NorNABs own market reasearch (2023) show that impact investments can achieve market-rate or higher returns, proving profit and purpose can coexist.

Impact Investing Is Equivalent to Philanthropy

Unlike philanthropy, which expects no financial returns, impact investing seeks both positive outcomes and financial gains. This strategy aligns investments with values while maintaining profitability.

ESG and Impact is the Same Thing

ESG follows an outside-in approach, assessing how external issues impact a company's value, while impact investing uses an inside-out approach, focusing on how a company’s activities create measurable positive change for society and the environment. In short, ESG seeks to minimize harm from the outside, whereas impact investing actively drives positive change from the inside.

Impact Investing Is Limited to Specific Sectors

This misconception overlooks the wide range of industries involved, such as technology, healthcare, and education. Impact investments are viable in any sector where positive societal or environmental contributions are made.

Measuring Impact Is Too Complicated or Vague

While impact measurement can be complex, tools like IRIS+ and the Impact Management Project (IMP) have simplified it. These frameworks help investors measure and report outcomes clearly.

Impact Claims Are Often Just Greenwashing

Concerns about exaggerated impact claims are valid, but third-party certifications, stricter standards, and better reporting now help differentiate genuine impact investments from superficial ones.

Impact investment fundamentals

A guide to impact investing in Norwegian

Whether you're in the very start of your impact investment journey or looking for inspiration for improvement, NorNAB has created this guide for you.

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Written by Norwegian impact investors, our guide offers practical advice on how to develop a strategy that delivers both returns and sustainable outcomes. It provides valuable insights into impact investing, strategies, and regulatory requirements.

Whether you're new or experienced, it will help you navigate the growing impact investing landscape and introduce you to best practices.

The guide offers

A definition of impact investing and how it differs from other types of investments.
How to develop an impact strategy that balances both returns and societal benefits.
An overview of relevant regulations and standards for sustainable investments.
Important questions investors should ask when planning impact investments.

An investment for your organization

Our members are asset managers, foundations, family-owned businesses, institutional investors,  sustainability consultants and lawyers, accelerators, angel investors, and companies focused on impact investing.

Joining NorNAB connects you to a powerful network advancing the impact investment agenda. Membership offers exclusive insights, collaborative opportunities like the 'NorNAB Insight Circle' for trust-based engagement, and expert-led sessions, positioning you as a leader in impact finance and contributing to best practices and influence policies.

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Comprehensive Knowledge and Insights: Members gain access to specialized reports, expert workshops, and in-depth masterclasses, providing deeper expertise and informed decision-making.
Valuable Networking: Members engage in trust-based partnerships and curated, high-value events, such as the 'NorNAB Insight Circle,' fostering strategic relationships and collaborations.
Leadership & Influence: Members actively shape best practices, lead thematic discussions, initiate executive roundtable  and contribute to policy influence and advocacy.
Collaborative Experience Sharing: Members participate in focused groups for best practice exchanges and gain enriched insights from peer contributions.