Impact investing used to be the province of high-net-worth individuals and institutional investors. You needed six or seven figures to get a seat at the table. That’s changed significantly, and Australian investors at almost every level now have options for putting their money to work on social and environmental issues.

But the landscape is confusing, and the terminology is inconsistent. Here’s a practical guide to getting started.

What impact investing actually means

Impact investing is intentionally investing in companies, organisations, or funds that generate measurable social or environmental impact alongside a financial return. The key words are “intentional” and “measurable.”

This distinguishes impact investing from:

ESG integration, which considers environmental, social, and governance factors as part of investment analysis but doesn’t require specific impact outcomes.

Negative screening, which excludes certain sectors (fossil fuels, tobacco, weapons) but doesn’t actively seek positive impact.

Responsible investing, which is a broad umbrella that includes all of the above.

Impact investing sits at the more active end of the spectrum. You’re not just avoiding harm; you’re intentionally seeking to create good.

Defining your impact priorities

Before you invest, get clear about what impact matters to you. Impact investing covers a wide range of issues:

• Climate and clean energy
• Affordable housing
• Health and wellbeing
• Education and employment
• Indigenous economic development
• Food security and agriculture
• Financial inclusion
• Biodiversity and conservation

You don’t need to cover all of these. Pick one or two areas where you want your money to make a difference, and focus there. You’ll make better decisions if you understand the issues you’re investing in.

The accessible entry points

Here are the main ways Australian investors can access impact investments, roughly ordered from most to least accessible.

Ethical super funds

If you’re an employed Australian, you already have a super fund. Switching to a fund with strong impact investing credentials is the simplest entry point. Funds like Australian Ethical, Future Super, and Verve Super explicitly invest for impact alongside returns.

Evaluate these funds on their investment strategy, fee structure, and evidence of impact (not just their marketing). Ask what proportion of the portfolio is genuinely impact-invested versus simply ESG-screened.

Listed impact funds and ETFs

Several ASX-listed funds and ETFs provide exposure to companies and assets with impact credentials. BetaShares, VanEck, and others offer ethical and sustainability-themed products.

The trade-off is that listed products are typically less “pure” impact than direct investments. They screen for certain characteristics rather than intentionally targeting specific outcomes. But they offer liquidity and accessibility that direct impact investments don’t.

Community finance

Community Development Financial Institutions (CDFIs) like Foresters Community Finance and Many Rivers accept investments from individuals and use the capital to provide microfinance and business loans to disadvantaged communities. Returns are typically modest (around bank deposit rates) but the social impact is direct and tangible.

Green and social bonds

Green bonds fund environmental projects. Social bonds fund social projects. Both are available in Australia from issuers including major banks, state governments, and the Clean Energy Finance Corporation.

Minimum investments vary, and some are accessible through bond funds rather than direct purchase. The returns are typically similar to conventional bonds of the same credit quality.

Direct impact investments

For investors with larger amounts (typically $50,000 or more), direct investment in social enterprises, impact-focused venture funds, or community housing projects is possible. Options include Social Enterprise Finance Australia (SEFA), Impact Investment Group, and various community housing bonds.

These investments offer more direct impact but less liquidity. You should be prepared to have your money committed for several years.

Building your portfolio

A sensible approach for most people is to layer impact across their portfolio:

Foundation layer: Ethical super fund as the base, representing the bulk of your investments.

Growth layer: Listed impact funds or ETFs for additional exposure to companies aligned with your values.

Direct impact layer: A smaller allocation to community finance, social bonds, or direct impact investments where you want the most tangible social or environmental outcomes.

The proportions depend on your financial situation, risk tolerance, and impact priorities. A common starting point is to move your super and add one or two impact investments as you become more comfortable with the landscape.

Due diligence for impact

When evaluating any impact investment, ask these questions:

What specific impact does this investment claim to generate? If the answer is vague, be wary.

How is impact measured and reported? Look for concrete metrics and independent verification.

Is there additionality? Would the impact have occurred anyway, without this investment?

What are the financial risks? Impact investing doesn’t mean accepting bad financial outcomes. Understand the return expectations and risk profile.

Who’s managing the investment? Track record matters. Look for fund managers with genuine experience in impact investing, not just conventional managers who’ve added “impact” to their branding.

Getting advice

If you’re unsure where to start, consider working with a financial adviser who specialises in ethical and impact investing. The Responsible Investment Association Australasia (RIAA) maintains a directory of certified responsible investment advisers.

Some AI consulting firms are also beginning to develop tools that help impact investors screen and monitor their portfolios, using data analytics to track both financial and impact performance. This is still emerging, but worth watching.

The bottom line

Impact investing in Australia is more accessible than it’s ever been. You don’t need to be wealthy, and you don’t need to sacrifice returns. What you need is clarity about your impact priorities, willingness to do some research, and the understanding that your money can do more than sit in a bank account.

Start small. Learn as you go. And remember that moving your money toward impact is one of the most concrete things you can do to support the kind of world you want to live in.