It all started with an ad that popped up while I was reading an article about how the ultra-wealthy plan to survive climate change. I was halfway through a paragraph about doomsday bunkers with artisanal mushroom cellars when a cheerful banner interrupted me. It featured a woman in a Patagonia vest standing in a golden wheat field, holding a reusable coffee cup and smiling like she’d just forgiven her ex-husband. The text read:
“Make your money do good. Try social impact investing today.”
Now, I don’t know what you picture when you hear “social impact investing,” but I imagine a group of young consultants in glasses that fog when they speak too quickly. They probably live in Brooklyn, drink cold brew with oat milk, and think Whole Foods is a form of activism. They invest in clean water initiatives while sipping San Pellegrino, unaware of the irony. Their portfolios are balanced not just for risk but also for moral superiority. If guilt had a NASDAQ listing, they would be its major shareholders.
I tried to learn more, which in my case means I Googled it and clicked the first link that didn’t look like homework. The general idea, apparently, is that you can make money and change the world at the same time. This is very exciting because normally those two goals are mutually exclusive. It’s a bit like finding out you can eat unlimited breadsticks and still lose weight. Suspicious but tempting.
In practical terms, social impact investing means putting your money into companies or projects that are supposed to do something beneficial for society; clean energy, affordable housing, gender equity, and so on. Which is lovely. But also suspicious. Because when Wall Street suddenly starts caring about justice, my first instinct is to check my wallet.
Still, the idea is seductive. It suggests that capitalism can be redeemed if we just use it a little more kindly. Like a chainsaw outfitted with baby-proof foam. The narrative goes: instead of donating to a food bank, you can invest in a sustainable vertical farm that grows microgreens for underprivileged vegans. It’s philanthropy, but with dividends.
Naturally, I was interested. Who doesn’t want to feel righteous and solvent? I could already imagine the dinner party conversations.
“Where do you invest?”
“Oh, you know, the usual. Renewable energy. Women-led startups in underserved regions. Goat milk cooperatives in Peru. The vibe is ethical but aggressive.”
But the more I read, the more complicated it got. Some companies were rated high in “social impact” because they used recycled office chairs and let employees bring their dogs to work. Meanwhile, the actual impact of their product was somewhere between negligible and morally questionable. One company offered tech support to nonprofits but also ran facial recognition software for defense contractors. It’s hard to know if you’re changing the world or just laundering your conscience through a mutual fund.
It reminded me of when my aunt became obsessed with “green cleaning” and replaced all her toxic sprays with vinegar and baking soda. Which was fine, except her house still smelled like cats and resentment. Sometimes effort is not the same thing as impact.
The real trick of social impact investing seems to be that it allows us to feel like we’re helping without actually having to get involved. It’s ethical outsourcing. You don’t have to volunteer at the shelter or attend the zoning meeting about affordable housing. You just buy a few shares in a company that builds solar panels in schools and then go back to watching your shows, smug in the knowledge that your portfolio is both diversified and morally evolved.
There’s also something very American about the whole thing. We love solving problems with money. It’s our national pastime. Why confront injustice when you can simply invest in its solution and earn a 7 percent return? It’s the kind of logic that leads someone to think, Well, I didn’t attend the protest, but I did buy stock in a tear gas alternative made from biodegradable seaweed.
That said, I’m not against the idea. I like the idea of investing in companies that aren’t actively melting glaciers or exploiting children. But let’s be honest. This isn’t going to fix society. You don’t fix a broken system by asking it to behave better while still expecting it to make you rich. That’s like asking your cat to stop knocking things off the counter but also keep being a cat.
The truth is, social impact investing is a step. A small, wobbly, possibly performative step. But maybe that’s all we’re capable of right now. After all, we live in a culture where the average person is more familiar with their Wi-Fi password than with their local city council representative. If buying feel-good stocks gets someone thinking about water scarcity or food deserts for the first time, maybe that’s something.
Just don’t mistake it for a revolution.
A revolution doesn’t come with an app interface and quarterly earnings reports. A revolution probably smells bad and involves talking to strangers in person, which most of us would rather avoid.
Still, I did move a little of my retirement fund into a fund labeled “high-impact, climate-positive, ESG-forward.” I have no idea what any of those words mean together, but the returns look decent and there’s a photo of a woman planting a tree on the brochure.
That has to count for something, right?
Join us in making the world a better place. You’ll be glad that you did. Cheers friends.