New Delhi: Impact Investors are spending more on projects that have a strong social or environmental benefit, with the capital invested into such projects rising by two-fold to US$228 billion last year, according to report by global grouping Global Impact Investing Network (GIIN).
GIIN is a New York-based not-for-profit group that works to promote impact investments and has around 230 members. Impact investments refer to those made with the aim of having a social and environmental impact along with the investors getting financial returns.
The eighth edition of GIIN’s Annual Impact Investor survey reveals that US$228 billion in impact assets among 229 investors in 2017, which is double the amount of US$114 billion reported in 2016 by 209 respondents in managed impact assets.
Marking a steady growth of impact sector over the years, about 158 investors had reported US$77 billion in total assets in 2015, while 146 investors reported US$60 billion in assets in 2014. The respondents indicated plans to increase capital invested by 8% in 2018, the report says.
Abhilash Mudaliar, director of research at GIIN, says the survey demonstrates that not only is this growth happening but also that investors are reporting strong results on both financial (91%) and impact performance (97%).
The report highlighted that over half of respondents target both social and environmental objectives with an additional 40% primarily targeting social objectives, while 6% primarily targeting environmental objectives. Reflecting a strong commitment to measuring and managing impact, nearly all respondents measure the social and/or environmental performance. Investors, the report adds, are profess their committed to the UN Sustainable Development Goals (SDGs) with 76% of investors tracking their investment performance to the SDGs or plan to do so in the future.
“The survey demonstrates there is significant momentum in the market and provides data and insights for investors to maximize their impact and ultimately tackle critical global issues such as access to education and healthcare, gender inequality, poverty, climate change, and more,” says Amit Bouri, chief executive and co-founder, GIIN.
GIIN’s findings are based on survey responses from fund managers (59%), banks (6%), foundations (13%), development finance institutions, pension funds & insurance companies (4%), and family offices (4%).
The survey also notes that most common cited challenges facing the growth of the impact investing industry are the lack of appropriate capital across the risk/return spectrum and the lack of common understanding of the definitions and segments of the market.