The term “impact investing” was coined in 2007, in the context of funds that were creating nonprofit ways to invest in the developing world.  It was a kind of philanthropy.  The term was then extended, as defined in Investopedia, to mean simply

"an investment strategy that aims to generate specific beneficial social or environmental effects in addition to financial gains."

By this definition, transformative investing as described in this website is one kind of impact investing.  At least in theory!

In practice, however, the word impact is now used too much and too lightly.  Investors should beware of funds that claim to be impact funds, but which in fact have lost much of the idea of generating beneficial effects.  These funds vote at annual meetings, but they normally vote with the company management against shareholder proposals.  They claim to have an impact, but do not make any special effort to improve their companies’ environmental practices.  This can be discovered by reading the funds’ descriptions of their investment philosophies, including their descriptions of how they vote at company meetings.  If they say that they vote first of all to return value to the shareholders, this may be a tip-off that they consider the environment only in a secondary role.  Ref. 8 supports this assertion.

Environmental investors believe that it is in everyone’s interest to keep the climate from changing drastically.  If a so-called “green impact fund” does not mention specific activities to address environmental issues, it is probably not thinking that way.

One common term used to describe such false advertising is greenwashing, or less commonly impact washing.