Impact Investing: An Investment Approach That Changes the World

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The reason social economy enterprises must prioritize both social value and profitability is that this ensures the sustainability of the business.

Only sustainable enterprises can achieve long-term impact and realize the goals they initially set.

 

Moreover, stable social economy enterprises are better positioned to attract impact investment.

Impact investment deserves attention because it influences both the growth and expansion of a business.

 

What is Impact Investing?

 

Impact investing is different from simply pursuing financial returns or making donations.

It involves investing in businesses or organizations that address social issues—such as the environment, poverty, education, and human rights—through business solutions, while simultaneously generating social/environmental value and financial returns.

Impact investing has been formally introduced in Korea for over ten years.

 

Investment targets include social economy enterprises, non-profit organizations, and other businesses or organizations that pursue social value while operating as a business.

 

The Background of Impact Investing

 

Generating profits while creating social value is not easy.

Relying solely on business operations often fails to secure sustainability, making organizations dependent on donations or government subsidies.

However, these approaches are vulnerable to environmental changes and lack long-term stability.

 

To overcome these limitations, investors increasingly sought ways to “make money while creating positive social impact,” which led to the rise of impact investing.

Globally, the impact investment market continues to expand, with an estimated size of approximately $1.57 trillion USD in 2024.

In Korea, the market is estimated at around 700 billion KRW (as of 2021).

 

Connecting Social Economy Enterprises and Impact Investing

 

Social economy enterprises relying solely on donations or subsidies face limitations in growth.

By attracting impact investment, businesses can expand operations, generate ongoing social impact, and build partnerships.

 

In short, impact investing is a powerful tool to achieve both social problem-solving and financial growth simultaneously.

It can enhance the sustainability of the social economy and serve as a core strategy for realizing long-term impact.

 

As impact investing grows rapidly in Korea, both investors and social economy enterprises need a strategic approach that balances sustainability and long-term performance.

 

 

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