What is Impact Investing About today_LB.pdf

In recent years, impact investing has taken on a role far greater in financial markets. It refers to directing capital toward ventures that aim to produce social or environmental benefits alongside financial returns. For business leaders and fintech innovators, understanding its mechanisms, trends, and implications has become essential. Eric Hannelius, CEO of Pepper Pay, shares his view on how impact investing interacts with fintech, and why it matters today.

1. What is Impact Investing About? Insights for Business Leaders and
Fintech Professionals

In recent years, impact investing has taken on a role far greater in financial markets. It
refers to directing capital toward ventures that aim to produce social or environmental
benefits alongside financial returns. For business leaders and fintech innovators,
understanding its mechanisms, trends, and implications has become essential. Eric
Hannelius, CEO of Pepper Pay, shares his view on how impact investing interacts with
fintech, and why it matters today.
Defining Impact Investing.
Impact investing involves putting money into enterprises, projects, or funds that have
explicit goals for positive social or ecological change. Unlike philanthropy, it does not
assume donors give without expectation of return; impact investors expect both
measurable positive outcomes and financial performance. Unlike traditional investing
that may avoid harm but does not seek to generate benefit, impact investing demands
quantifiable outcomes across dimensions such as climate, inclusion, health, or
community development.
Recent reports underscore rapid expansion in this field. According to Mordor
Intelligence, by 2025 the impact investing market has reached roughly USD 1.47 trillion.
Projections suggest this figure will grow toward USD 2.08 trillion by 2030. The growth
rate moves at a compound annual growth above 7 percent in many segments. Another
study from Research and Markets estimates the market size will climb to about USD
253.95 billion by 2030 in certain sub-segments of impact investment, driven by demand
from institutions and individuals.
Key Drivers of Growth.

2. One driver relates to investor expectations shifting. Younger generations, institutional
investors, family offices are increasingly demanding that capital align with values,
whether that means reducing carbon, fostering equality, or supporting underserved
communities. Green bonds, social bonds, and sustainability-linked financial instruments
have multiplied as tools to direct funds toward impact goals.
Another driver lies in regulatory frameworks and disclosure norms. Governments and
regulatory bodies have introduced requirements and incentives that reward or require
transparency about environmental and social performance. This has imposed discipline
on companies and investors, encouraging them to set goals, report on outcomes, and
manage risk associated with environmental or social externalities.
Technology also plays a role. Better data collection, analytics, remote sensing, and
impact measurement tools make it feasible to assess outcomes with higher precision.
Big data helps in validating results, tracking metrics over time, and comparing against
baselines. This contributes to credibility, which impacts pricing, investor confidence, and
access to capital.
Challenges Within Impact Investing.
Generating measurable impact involves trade-offs and complexity. One common
difficulty comes from defining and measuring impact. What metrics are reliable,
comparable, transparent? For example, is job creation in a community weighted more
heavily than reductions in emissions? Different investors use different metrics, making
apples-to-apples comparisons difficult.
Another issue: some investment opportunities that deliver strong impact carry higher
risk or longer timelines to yield results. For fintech ventures, regulatory risk, scalability
challenges, capital intensity, or unexpected market shifts may delay or reduce returns.
Leaders must balance patience with proof of performance.
There is also risk of “impact washing,” where entities claim ESG or impact credentials
without strong substantiation. Investors and regulators are increasingly aware of this,
which raises stakes for accuracy in reporting and authenticity in strategy.
The Fintech Intersection.
Fintech has potential to strengthen impact investing in several ways. Platforms that
lower barriers to investment, allow fractional ownership, or combine social impact with
financial innovation can expand access. Fintech tools can facilitate transparency, by
providing real-time tracking of impact, dashboards for investors, or integrating impact
metrics into the user experience.
Eric Hannelius refers to Pepper Pay’s work as a case in point. The company has
committed to helping small and medium-sized businesses and underserved
communities by making digital payments accessible and secure. Those efforts
contribute not only economic value but also social inclusion—businesses that may have
had limited access to robust payment infrastructure are now more competitive and
resilient.
Eric Hannelius has remarked that when fintech leaders embed impact thinking in
product design—such as affordability, security, inclusion—they are able to address both

3. customer needs and societal goals. He sees impact investing not as a marginal activity
but one that can align with long-term profitability and brand trust.
Strategic Approaches for Leaders.
To engage impact investing well, business leaders and fintech professionals should
treat impact intentions with as much rigor as financial ones. That means defining clear
impact objectives, selecting suitable metrics, assessing baseline and ongoing data, and
incorporating oversight.
It helps to partner with credible impact measurement firms, or use frameworks tied to
global goals (for example, Sustainable Development Goals). Transparency in reporting
and openness with stakeholders builds credibility.
Fintechs that commit to inclusion (e.g. digital access in regions with limited banking),
secure payments, affordable services, or financial tools for underserved populations can
find meaningful ways to deliver impact. Simultaneously, structuring investments so that
returns meet expectations involves risk management, scenario planning, and often
patient capital.
Impact investing has moved into mainstream financial strategy. It is no longer optional
for institutions or companies that wish to remain relevant to customers, investors, and
regulators. That growth reflects broad shifts in market preferences, regulatory demands,
and technological capacity for measurement.
For fintech actors, impact investing offers opportunity to innovate in financial inclusion,
transparency, and social value, while sustaining business models. As Eric Hannelius
has emphasized, aligning impact with financial performance becomes a source of trust
and competitive advantage. Leaders who embrace both objectives, shape clear impact
strategies, and commit to rigor in measurement are those who will shape markets in the
years ahead.