At a conference organised by the Luxembourg Private Equity and Venture Capital Association (LPEA), it was announced that impact investing can yield the same profit margins as traditional funds, between 15% and 30% depending on the investment stage, but that it is essential that investors understand what exactly is meant by impact investing.

According to Hedda Pahlson-Moller, business angel and founder of the Luxembourg-based social impact catalyst Tiime, in a LPEA press release, “one needs to have a common language for all the initiatives out there.”

This is a point that was also stressed by another speaker at the LPEA conference, Corinne Molitor, director of Innpact, an inpact finance advisory outfit, in a recent Delano article when she called for a, “taxonomy… so that investors can see which companies have a good social and environmental impact that is measured throughout the investment’s lifecycle.”

“Socially responsible investing, a policy adopted by many investors, aims to minimize negative impact,” Pahlson-Moller explained. “While impact investing aims at maximising the positive impacts investments can have on society.”

Other panellists at the conference included Clément Chenost of the Moringa Partnership; Lionel Cormier of Demeter, and Jérome Wittamer of Expon Capital and president of the LPEA. They agreed that, although every investment has an impact such as economic growth and job creation, fund managers can go further by driving investment into areas that can have a greater social impact.