What You Need to Know About Impact Investing

Invest in companies and organizations that make positive contributions to society.

By Catherine Brock – Updated Mar 20, 2026 at 3:33 PM EST | Fact-checked by Margo Winton Parodi

Key Points

Impact investing focuses on achieving social good while earning returns.
Investors choose firms that match personal values like renewable energy but avoid harmful sectors.
Rigorous data analysis is essential for verifying a company's positive impact.

Impact investing is growing in popularity as investors become increasingly aware of how corporations can affect society, communities, and the environment. If you've become wary of investing in companies with harmful, unsustainable business practices, you may be ready to adopt impact investing as a strategy.

Through impact investing, you can invest in companies committed to social good. This can take several forms, such as creating new and sustainable food sources, producing clean and accessible water, or contributing to the renewable energy infrastructure.

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An infographic explaining the four core elements of impact investing and how to identify the best options to invest in. — Image source: The Motley Fool.

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Why make an impact investment?

You might adopt impact investing if you are passionate about social initiatives and positive corporate behavior. Impact investors typically feel great about using their wealth to support causes that are important to them. Ideally, this results in both financial gain and the satisfaction of knowing you've contributed to social or environmental causes.

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.