How social and climate impact investments drive two returns

How social and climate impact investments drive two returns

By Diana Tjoeng, Head of Asia and Impact Investments, Good Return

For Australian wholesale investors, protecting capital and generating steady returns with low risk has long been the foundation of sound portfolio strategy. Increasingly, however, another consideration is emerging: whether investment capital can deliver measurable social and environmental improvements, and whether the two objectives can coexist without compromise.

There is a growing desire for capital with purpose and investments that align with personal values. Having built wealth, many sophisticated investors begin to ask not simply “What will this return?” but also “What does this capital enable?”

Impact investing is often misunderstood as sacrificing financial returns for impact returns. In reality, well-structured impact investments can deliver competitive, stable returns while deploying capital toward climate, social and community priorities strengthening livelihoods, advancing gender equality and building economic resilience.

A gender lens on regional reslience

In Australia, the overwhelming majority of venture capital continues to flow to companies founded solely by men, with only a small fraction directed to female-led businesses. The consequence is not only inequity, but inefficiency. High-potential firms scale more slowly, innovation is stifled, and economic value is left unrealised.

In parts of our own region, however, the capital gap is even more pronounced.

Across Asia-Pacific, women-led small businesses sit at the centre of local economies. They farm, manufacture, trade and operate tourism ventures. They generate income, employ neighbours and sustain extended families. Yet millions remain excluded from formal financial systems, hamstrung without the ability to produce credit history or access loans that will enable them to grow and scale.

According to Women's World Banking there are roughly 780 million women globally who do not have access to formal financial services. This means no bank account to save and store their money. They aren’t able to make and receive payments conveniently, and they don’t have access to credit. Many entrepreneurs operate without traditional collateral, within informal business structures, or in environments shaped by systemic bias. The result is constrained growth, suppressed productivity and fragile local economies.

For Australia, this matters.

Asia-Pacific underpins our trade relationships, supply chains and long-term prosperity. Economies where women participate fully in financial systems are more stable, more productive and better positioned for long-term growth.

Impact investment in action

‍Five years ago, Good Return put this thesis into practice with the launch of a $1 million Impact Investment Fund backed by Australian investors, including Peter McMullin’s Good Business Foundation and the Australian Government Department of Foreign Affairs & Trade. The objective was straightforward: expand access to responsible finance in markets where capable entrepreneurs were locked out of formal credit.

Through partnerships with three regional financial institutions, that initial capital catalysed more than $5 million in lending across Indonesia and Cambodia. More than 600 entrepreneurs accessed loans, 90 per cent of them women-led businesses.

Importantly, the approach extended beyond capital alone. Grant funding supported institutional reform, training nearly 5,000 financial service staff in gender-inclusive lending practices.

The fund achieved its target returns, delivering performance comparable to Australian bank term deposits.

Its architecture was deliberately simple: a guarantee structure that shared risk with local lenders, allowing them to extend credit to borrowers without traditional collateral while maintaining prudent standards.

The outcomes accumulated quietly but steadily.

One female farmer invested in greenhouse infrastructure and moved from a single annual rice harvest to multiple crop cycles. When women-led businesses gain access to finance, the effects compound. Incomes stabilise. Families invest in education. Enterprises are better positioned to withstand environmental and economic shocks. Employment grows. Replicated across hundreds of enterprises, these shifts reshape local economies over time making communities more resilient.

Moving into the mainstream

Encouraged by those results, in 2025 a second fund was established as a $10 million evergreen vehicle, structured to recycle capital and scale over time. The ambition is to unlock an estimated $50 million in lending across Fiji, Cambodia, Nepal, Indonesia, Papua New Guinea and more countries in our region.

Institutional support is growing. A recent $1 million commitment from the Macquarie Group Foundation signals increasing confidence in models that combine financial discipline with demonstrable impact.

For investors, this is not about sentiment or philanthropy. Climate exposure, supply chain fragility and regional instability are material considerations. Strengthening small enterprises in neighbouring economies contributes to broader market stability.

But it also speaks to something more personal. Being proud of what your capital stands behind. The economic activity it enables. The people it effects.  

Performance and purpose need not be competing forces. That is the dual dividend: returns that protect and grow capital, and investments that align with the values of the people behind them.