A funny thing about impact investing is that while the idea of investing capital in socially-responsible businesses in support of the greater good is not new, the actual term “impact investing” is only about a decade old, coined by the Global Impact Investment Network in 2009 when the group also defined the term.

“Impact investments are investments made to companies, organizations and funds with the intention to generate measurable social and environmental impact alongside a financial return,” Brian Trelstad told students and guests at his Executive Speaker Series lecture. “Notice it doesn't say anything about how high the financial return, how that might compare with the market, doesn't say how much impact, just that there is an intention to deliver some measurable social or environmental impact and a financial return.”

Trelstad, a partner at Bridges Fund Management, talked about the history, the current state, and the future of impact investing, an area in which he’s been working since before the term existed. At the Acumen Fund in the mid-2000s, Trelstad was responsible for investments in Sub-Saharan Africa and South Asia, including some that might come as a surprise to Americans.

“We invested in the first ambulance company in India. We take 911 services for granted, but in India in 2006, ambulances were hearses. You only called them if you wanted to transport your dead relative to the morgue,” Trelstad recalled.

The firm invested in the company, which started with five ambulances in Mumbai before scaling up to a city-wide operation. But Trelstad noted that while the direct impact was that sick people were being taken to hospitals, an indirect impact was that the company was essentially creating India’s first emergency medical system, training emergency medical professionals and a higher level of emergency transport care. Trelstad said that along the way, his firm invested in another company that helped to upend the existing “somewhat corrupt” contracting system in place, leading to even more change.

“So as you think about the impact of a business that an investor is seeking to have by investing in that business, it can range from the direct -- number of hospital trips -- to the indirect -- creating a new category -- to the systems level change,” he explained.

Trelstad said he was in Ohio this week because Bridges has invested in a Cincinnati-based drug treatment center company. “We spent time looking across the country and ultimately found a partner and entrepreneur that we've invested in here who's got a model of counseling and buprenorphine treatment that we think has higher quality outcomes,” he explained. “So we, as an impact investor, are trying to build a business that can address this. While there are other policy changes that need to be made, we think that this business model can be replicated and will address the needs of those who are suffering from a substance abuse disorder.”

Trelstad said that on the individual investor’s level, impact investing can be as simple as choosing to put companies in their investment portfolio that use sustainable practices, or align with the investor’s religious or moral views, or have management practices that the investor supports.

Trelstad talked about the new pilot program that the MBA Impact Investment Networking Training (MIINT) is starting with the Farmer School’s John W. Altman Institute for Entrepreneurship. Up to this point, the MIINT program has been reserved for graduate students from some of the top schools in the nation. “One of the questions is that many of the students have already embarked on their careers, and the opportunity really is to catch people while in undergrad to help think through what career steps you should take to enter into finance or consulting and then move into impact investing,” he explained. “We're excited to see what comes out of the experience.”

In the future, Trelstad remarked, there are three questions that will have to be addressed:

• Do we really know if philanthropists can maximize their social return?
• Can a responsible investor help prevent financial losses by anticipating negative social consequences?
• Can sustainable investing deliver market-beating returns and include social output, at least better than investing that doesn’t take sustainability into account?

“I think the question is what role can an impact investing lens play in your career no matter where you go, whether that's purely 'All I want to do is make as much money as possible,' to public service, to nonprofit management,” Trelstad remarked. “I think the questions about how you think about the impact of the enterprise's activities, from employment practices, their good governance, to their environmental footprint, have changed fundamentally.”

Ultimately, Trelstad said, it’s going to be the coming generation of business leaders that will need to ask important questions of the companies they join or invest in. “I don't think you should assume that those questions have been answered intentionally or thoughtfully. If we can get to ask those questions and help those companies, most of whom have probably ignored these issues, potentially to their peril,” he said. “You should think about your career when you think about investments. If you want to invest your time in a company that’s not going to think about risks or align with your values, that’s an investment decision.”