Global impact investing market soars above $500bn

What claims to be the first comprehensive estimate of the global impact investing market has put the current figure at $502bn.

The landmark report from the Global Impact Investing Network (GIIN) released today has collected data from more than 1,300 impact investors from around the world.

Sizing the Impact Investing Market includes data on assets under management (AUM) from asset managers, foundations, banks, development finance institutions, family offices, pension funds, insurance companies and others.

The estimated figure is more than double the $228bn estimated by GIIN in June last year, following its 2018 Annual Impact Investor Survey – although this took data from just 229 organisations.

The GIIN said that although impact investing has become increasingly popular, a clear estimate of the market’s size has been difficult to capture due to a lack of available data and the fast-evolving nature of the industry.

“As the impact investing industry develops, it is critical that we further develop our understanding of the contours of the market – and one of the most important and fundamental data points about any industry is its current size,” said GIIN CEO and Co-Founder Amit Bouri. “This research gives us insight into the current state of the market, and it will also lead to deeper conversations about the market’s future potential.”  

GIIN said that the market-sizing research not only established a fundamental understanding of the market’s current scale but also served as a first step in a GIIN initiative to ensure the impact investing market continues to scale with integrity.

The publication of the report will lead into the launch of two further pieces of industry infrastructure that are designed to maintain the integrity of practice. On April 3, the GIIN will launch the Core Characteristics of Impact Investing, which outline the elements that define impact investing and distinguish it from other complementary investment approaches. IRIS+, a comprehensive, metrics-based system for impact measurement and management that enables data comparisons across an impact investing portfolio, will launch in late spring. 

“The results of this study underscore the momentum of impact investing, but also the need for continued growth across the responsible investing landscape if we are to address global challenges like those outlined in the Sustainable Development Goals,” Bouri continued. “As the industry grows, we need to be sure it scales with integrity—ensuring good intentions translate into real impact results.”

Although the figure is impressive, and growing fast, the $502bn is tiny in comparison to the current figure for so-called ‘sustainable’ investments.

A McKinsey & Co. study in 2017 found that more than a quarter of the $88 trillion assets under management globally were invested according to environmental, social and governance principles known as ESG.