The positive impact or outcome that would not have occurred without specific investment or intervention.

An investment team or firm tasked with selecting and managing assets in a portfolio or fund on behalf of investors.

Financing that uses patient risk-tolerant ‘catalytic capital’, for from development or philanthropic sources, in order to attract and mobilise additional private capital flows to impact investment opportunities.

The multi-trillion markets on which companies, governments and other organisations raise large-scale funding by selling financial instruments such as shares and bonds to investors.

Investment capital that accepts higher risk or reduced returns to enable (‘catalyse’) other third-party investment in a new and unproven opportunity that would otherwise not be possible. Catalytic capital might mitigate risk for other investors by providing a guarantee, taking a higher-risk tranche or a ‘first-loss’ investment.

An economic model aimed at minimizing waste by keeping resources in use for as long as possible through recycling and reusing.

Reducing and removing greenhouse gas emissions.

Investing alongside other investors in a project or fund, often on the same terms.

A member-owned and democratically controlled organisation formed to meet the common economic, social, and cultural needs of its members. Profits are typically reinvested or distributed among members rather than external shareholders.

An organisation operating for the benefit of the community, often using a democratic, one-member-one-vote system.

the sustained ability of a community to respond to, withstand, and recover from adverse situations or disruptive challenges, both natural and man-made, sudden or chronic.” (The definition was developed by UK-based NGO HOPE not hate.)

The integration of social and environmental concerns into a company's core business operations.

A government-backed institution that invests in private sector projects in low and middle income countries to promote job creation and sustainable economic growth.

A developing nation that is in the process of becoming an industrialised economy, and can therefore see more rapid rates of economic growth than developed markets.

The positive social or environmental effects generated by the products or services provided by a company.

Factors incorporated into investment decisions to identify risks and opportunities.

A form of regulated collective investment fund.

A neutral term for firms providing financial advice, emphasising investment management services.

A professional focusing on establishing financial and life goals with clients.

a collective giving group where members pool their money and/or resources and democratically review and select charitable causes or community projects to fund with grants.

An individual with more than £1m in highly liquid assets. (ultra high net worth individuals have over £25m)

Evidence of real-world outcomes achieved through impact investments.

Tax-advantaged products that can hold various investments.

An organisation that invests capital on behalf of its members, policyholders or beneficiaries, with an in-house or third-party asset manager overseeing the day-to-day running of the investment portfolio. Institutional investors include pension funds, insurers, charities and foundations, and sovereign wealth funds, and comprise the largest investors in the world.

Tax-advantaged products that can hold pooled funds.

Moving to a net zero carbon global economy in a way that is fair and inclusive to everyone – at every social level and in every geographic region. A just transition should maximise the opportunities created from moving to more sustainable practices by creating decent work opportunities and leaving no-one behind.

A commitment to balance emissions produced and emissions removed from the atmosphere.

Funds that mirror or sample the holdings of a market index.

gives money to charity without paying tax on it paid through PAYE from someone’s wages or pension. The donation must be administered through the employer.

Retirement funds that can be invested in various options, including socially responsible choices.

The practice of developing real estate assets in specific locations to achieve specific social or environmental objectives, while also targeting a financial return for investors.

Asset classes such as private equity, private debt and infrastructure that aren’t traded on public stock markets and can therefore give investors a lot of control to achieve their social and environmental objectives.

The practice of structuring a financial institution’s loan portfolio into securities that can be sold to investors in order to free up capital on the institution’s balance sheet for further lending and investment.

Financial products used by the banking sector to fund impact initiatives.

Focusing on systematically screening out harmful products and practices (such as companies involved in tobacco, firearms or gambling) from an investment portfolio.

Describes the gradations of financial return vs impact that capital may look to achieve. Ranges from traditional investing, which solely looks to deliver financial return, to impact investing, which looks to achieve both financial return and impact – and, finally, philanthropy, which looks to achieve impact with no expectation of financial return.

A type of blended capital widely used for impact investment where junior tranches absorb any losses first so senior tranches are protected from loss – thereby enabling more risk-averse investors to participate.

Selecting companies that have the potential to outperform the market because they are managing environmental, social and governance (ESG) risks and opportunities in a more sustainable way than their peers and are therefore more likely to flourish in a changing landscape.

In impact terms, a blended finance transaction where a lead investor such as a multilateral development bank syndicates part of a loan to institutional investors, thereby enabling the latter to participate in development opportunities – for in emerging markets.

The finance-first end of the spectrum of capital, focused on maximising financial returns, without any responsible, sustainable or impact investing considerations.

Organisations can use funds for operational costs or development as needed without specific expectations or ties to how the money is to be spent.

A professional managing others' wealth, providing services like investment selection and tax management.

An individual who invests their own money into startups or small businesses in exchange for equity, typically acquiring a minority stake ranging from 1% to 25%. Angel investors often provide not only financial support but also mentorship and industry expertise, playing a crucial role in the early stages of a business's development.

A type of company committed to ethical financing and positive societal impact. B-Corp certification is awarded by B Lab and requires companies to meet high standards of social and environmental performance, accountability, and transparency.

Short-term loans provided to non-profit organisations to address cash flow challenges.

Achieving net zero carbon dioxide emissions through a combination of cutting emissions and absorbing or capturing them.

Entities redistributing wealth for charitable purposes, with Trusts being agreements and Foundations owning assets outright.

the ability to adapt to and prepare for the impacts of climate change

An alliance whereby institutional investors and impact investors, including MDBs and DFIs, and others such as foundations, jointly establish an investment vehicle to catalyse capital towards an social or environmental impact objective.

Investment managers with complementary skill sets and expertise, e.g., a mainstream asset manager and an impact manager, cooperate to leverage their respective capabilities to create a combined investment offering that is attractive to institutional investors.

Collaborating with other philanthropists to address issues together, often through pooled funds.

A method for community organisations to raise finance from individual investors who become voting members.

Loans offered at below-market interest rates or over longer periods to support NGOs and their beneficiaries.

Raising finance by asking a large number of people each for a small amount of money.

Funds managed by a sponsor for charitable giving, offering benefits similar to Charitable Foundations.

Actions taken by shareholders to influence a company's behavior towards more sustainable practices.

A scheme providing tax advantages for some impact investments.

Funding instruments for organisations committed to positive social or environmental impact, offering interest repayments.

The obligation on institutional investors such as pension fund trustees to act in the best interest of scheme members. The Impact Investing Institute has worked to show that fiduciary duty and impact investing are compatible.

The UK regulatory body overseeing financial advice and markets.

Securities that pay a fixed regular income and return capital to investors at the end of a fixed term. Including government bonds like UK gilts, fixed income plays a key role in funding impact activities.

The exaggeration of environmental or social impact by companies.

Investments made with the intention to generate positive, measurable social and environmental impact alongside financial returns.

Funds that prioritise impact alongside financial returns.

A tax-free way to invest in alternative finance options like peer-to-peer lending.

An impact investor's deliberate goal to contribute to specific positive and measurable outcomes.

A form of regulated collective investment fund1.

Investment funds and other vehicles built expressly to help finance a transition to a net zero carbon world that is inclusive and beneficial to society – including by incorporating the Just Transition Elements.

A form of regulated collective investment fund.

Investment where the investor is willing to commit for the very long term before realising a financial return in order to support early-stage enterprise and innovation or higher-risk investment – typically in order to solve a social or environmental challenge.

A form of alternative finance that can be invested in through an IF ISA.

Using capital to generate positive social and environmental change, often without expecting financial returns.

A professionally managed fund where multiple investors' money is combined.

Refers to investable assets that are tangible – principally property and infrastructure – rather than tradable securities such as equities and bonds.

A scheme providing tax advantages for early-stage impact investments.

A social enterprise is a business that prioritises specific public interest objectives over shareholder profits.

An individual with significant assets but whose financial decisions are affected by liabilities and variables. Their net worth’s stability can be impacted by shifting political and economic changes

Active engagement with invested companies or fund managers to encourage sustainability improvements.

FCA rules for providers of investment funds with environmental and social characteristics.

a group of individuals or organizations combined to promote a common interest

Constructing a portfolio based on specific medium to long-term trends.

A collection of seventeen interlinked objectives adopted by the United Nations designed to serve as a shared blueprint for peace and prosperity for people and the planet.

An approach combining elements of venture capital and philanthropy.