The global impact investment market is now worth around $502 billion, according to a report.
Launched on April 1, the report titled “Sizing the Impact Investment Market” by Global Impact Investing Network (GIIN) is claimed to be the most comprehensive research on impact investment yet that analyzes the size and structure of the impact investing market.
Coined in 2007, impact investing is the term used in describing investments that benefit the society and environment while generating financial gains.
The $502-billion figure is more than twice the $228 billion amount declared by GIIN in its 2018 Annual Impact Investor Survey, which collated data from around 229 organizations.
The study was based on the number of assets under management (AUM) data on more than 1,340 global impact investors. They include asset managers, which, at more than 60%, constitute the largest group; foundations; banks; pension funds; family offices; and insurers. The paper only counted organizations, not individual investors. As for AUM, asset managers comprised 51%, and development finance institutes (DFIs) made up the other 27%.
On average, the size of investor AUM is $452 million, showing that even though most organizations are small, some investors manage substantial impact investing portfolios.
Most of the impact investors are found in developed markets like the US and Canada (58%) as well as Western, Northern and Southern Europe (21%), the report said. Only 2% of investors are in East Asia, while another 3% are in South Asia and 2% are in Southeast Asia.
Even though the impact investing market has developed rapidly in the past decade, analysts say the world still needs trillions of dollars to address crucial global social and environmental challenges, such as the ones shown in the UN Sustainable Development Goals. Hence, impact investment has plenty of room for more growth and potential for investors, GIIN report said.