Managing Director at American Family Insurance Institute for Corporate and Social Impact.

In today's rapidly changing world, the role of investors has evolved beyond just financial returns. As climate change accelerates and low-income communities disproportionately bear the burden, the imperative for impactful investments is more pronounced than ever. Thankfully, impact investing can successfully achieve two bottom lines: financial success and social impact.

A recent study by the Global Impact Investing Network revealed that 79% of investors met or exceeded their financial targets, while an impressive 88% achieved their impact goals. This is a testament to the growing recognition that impact investing can pay off on both fronts.

In my role, my mission is to address equity gaps in income, wealth or opportunity; foster community resilience; and drive innovation. I've witnessed the dual benefits of impact investment firsthand as we celebrated five years of impactful work this past month.

Let's explore three ways in which impact investing can make a difference by combating climate change, promoting equitable access to technology for traditionally underserved populations and strengthening community resilience.

1. Fueling Climate Innovation

As of early November, there have been a staggering 25 natural catastrophes in the U.S. this year that caused losses exceeding $1 billion each. These events can not only wreak financial havoc but also leave survivors grappling with emotional and physical health challenges.

In the race to address climate change, impact investors can consider whether the startups they're thinking of supporting aim to reduce greenhouse gas emissions or have a goal of lessening the severity and frequency of natural disasters. This could help alleviate the mounting burden on communities and businesses.

2. Bridging The Access Gap

The transition from fossil fuels to clean energy holds great promise but remains out of reach for many. With generational wealth in the U.S. distributed unevenly across racial and socioeconomic groups and unequal access to new technologies, a devastating cycle of disparity continues. That’s why it’s not just about funding new technologies that lower emissions; it’s about finding innovative ways to bridge the access gap.

By supporting startups that aim to resolve gaps in access to climate technology, investors can help provide communities with access to clean energy and the accompanying savings. When exploring investments, consider startups that devise innovative ways to provide clean energy access to underserved communities; in doing so, investors can empower them to thrive and simultaneously generate returns on investment.

3. Strengthening Community Resilience

As many organizations seek to stop climate change in its tracks, we also have to recognize that its effects are already impacting many communities. Impact investors have an opportunity to think about how they can bolster their communities to become more resilient in the face of worsening weather events.

Investors can explore both reactive and proactive solutions that play a role in combatting climate change. For example, I've seen a disaster-solutions startup that uses artificial intelligence to assess and disclose physical climate and business downtime risks to help customers determine how to best mitigate risks. This allows it to identify risks ahead of time and plan for the worst-case scenario.

How To Add Impact And Collaborate Toward A Better Future

If you’re considering adding an impact lens to your investment thesis, a good starting point might be asking yourself a few simple questions about the impact the business will have. For instance, who is the end beneficiary of this technology? Is it impacting the underserved or those who can already access these resources? By asking questions like this, I’ve found startups that are not only making greater impacts through the populations they serve but are also having a unique advantage by targeting markets that are less saturated. This is a win-win for startups, investors and the end-users who have been historically overlooked.

If you want to take a larger step toward impact investing, establishing an impact framework is often necessary to evaluate deals. From the experience at our firm, I recommend starting that process by looking at resources like the Global Impact Investing Network and the United Nations Sustainable Development Goals. Both organizations have great examples of standard goals and metrics, which can aid in developing a more robust framework.

Climate change reverberates through every sector, and the synergy of impact investing and innovation is paramount. Investors' goals can extend beyond merely curbing the warming of the planet; they can aim to help mitigate the consequences faced by communities and the resources that serve them. This necessitates collaboration. To effectively tackle the climate crisis and support community preparedness and recovery, it's crucial for a diverse array of stakeholders to come together. This coalition includes nonprofits, corporations, government bodies, impact investors and financial institutions.

By collaboratively empowering energy-efficient innovation, bridging energy access gaps and prioritizing resiliency, investors can contribute to a future that is better for the environment, society and all communities grappling with the impacts of climate change.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?