Global volume of capital invested in impact deals in 2024 falls by 30% compared with previous year – GIIN survey
Impact assets under management keep growing but transactions drop as impact investors report economic headwinds – while they move towards 'safe' investments in mature companies and developed markets.
The volume of capital invested in impact deals during 2024 dropped by nearly a third compared with the year before, as the number of transactions plummeted by 197%, according to the Global Impact Investing Network’s latest survey of impact investors.
The State of the Market 2025, unveiled yesterday at the GIIN Impact Forum in Berlin, analysed responses from 429 investors, 374 of which had made at least one impact investment since their inception, based on information as of December 2024.
It found that total impact assets managed by the investors surveyed grew by 11% in 2024. Over the 2019-2024 period, impact assets under management grew by 21% each year on average, well above total assets under management (including non-impact), which saw an average yearly increase of 5%.
“Despite seismic shifts in the global economy, the impact investing market continues to grow… a signal of the enduring confidence in our market,” GIIN CEO Amit Bouri writes in the report foreword.
But investment volumes in 2024 were down 30% year on year, despite showing average growth over a six-year period, “pointing to a possible capital pullback”, according to the researchers.
Investors surveyed last year did expect a downturn in capital invested in 2024, but the drop was 18% bigger than expected.
Figures show that the median impact investor in the survey didn’t experience such a steep drop, instead reporting a small 4% increase of capital invested over 2024 and a 2% increase in the number of deals. This suggests, according to the researchers, that the fall in capital invested in 2024 was driven by larger investors pulling back on impact capital.
Risk-averse
The survey also shows that investors are increasingly focusing on more mature companies rather than early-stage ventures. Investments in mature, public-listed companies grew at a yearly average of 51% over the past six years, while allocations to seed and startup-stage businesses dropped 8% a year on average during the same period.
“Investors are increasingly shifting towards ‘safer’ stages of growth,” the researchers write, “perhaps signaling aversion to uncertainty.”
Impact investors in the survey, which are overwhelmingly headquartered in Northern America and Europe (85%), also increasingly tend to invest their money close to home, “despite the growing opportunities in emerging markets”: 75% of impact assets under management allocated by organisations headquartered in Northern America was invested in the same region, and organisations headquartered in Western Europe invested 53% of their impact assets under management in Western Europe.
Ultimately, the move toward ‘safer’ investments reflects caution, not urgency
The proportion of impact investors targeting market-rate returns has also increased in the past six years, according to the report, and a higher percentage put financial performance above impact performance in their strategies – which could explain their apparent risk aversion, whether in terms of company type or geography.
The report recommends: “Ultimately, the move toward ‘safer’ investments reflects caution, not urgency. The volume of capital required to address global challenges at scale remains insufficient, and impact investors are encouraged to explore opportunities in low- and middle-income countries, alongside innovative financial models and technologies that serve people and the planet.”
Gap in self-perception
As in previous years, investors in the survey mentioned economic indicators had the greatest effect on their impact investments, including inflation (an issue for 91% of respondents), economic downturns (88%) and interest rates (88%). More than two thirds of investors surveyed said inflation had become worse over the past three years.
Other macroeconomic challenges are more region-specific. ESG backlash was seen as a challenge by two thirds of respondents, with the problem more acute among US-based investors, with 75% of them saying the issue is becoming increasingly problematic, while just 52% of non-US headquartered respondents said the same. Nearly two thirds of European investors, more exposed to the war in Ukraine, say they see armed conflict as a rising issue, while that was the case for just 31% of investors in other regions (only a small percentage of investors in the sample are located in regions exposed to conflicts elsewhere).
The gap in self-perception is notable
Meanwhile, impact washing appears as the biggest industry-wide problem for respondents, mentioned by 71% of the sample, with more than half saying the problem was getting worse. However, a much smaller share – 10% – thought this was a problem at the level of their own organisation.
In terms of impact measurement, most companies tend to believe they’re having more impact than their peers. This is mostly driven by a feeling of contribution to change (for 86%) rather than actual metrics against targets (61%).
Researchers recommend more data transparency and consistency with impact measurement, although they acknowledge this is a challenge where fragmentation of impact measurement practices makes comparison difficult. The quality of impact data was also mentioned as a challenge by most investors (93%).
“While investors are aware of issues with impact washing and performance data, they often struggle to recognise them at the organisation level,” the researchers write. “The gap in self-perception is notable.”
- Read more: Is your impact better than mine? Impact investors frustrated by inability to compare with peers
Key players
Private markets remain the preferred asset classes for impact investing, with private equity accounting for 41% of assets under management, private debt for 21% and private real assets for 14%.
While still representing a tiny portion of the total, capital invested in equity-like debt increased by an average of 54% per year since 2019 – suggesting a small subset of investors are committing more to non-traditional types of investments, for example those used in blended finance.
Private equity saw the second greatest increase in dollars invested in the past six years, with a yearly growth average of 32%.
Institutional investors – which already appeared as a substantial and growing source of impact capital in the GIIN’s global market sizing report last year are increasing their role: capital from insurance companies increased by a yearly average of 49% since 2019, and capital from pension or retirement funds increased by a yearly average of 47%.
Family offices are a source of impact capital for a third of investors surveyed, but provide only 8% of total impact assets under management.
To make comparisons over multiple time periods, researchers used data from a subset of investors that responded both to the 2019 and 2025 surveys to look at a six-year evolution, and another subset that responded to the 2024 and 2025 surveys, to reflect one-year changes.
Header image: Amit Bouri speaks at the GIIN Impact Forum in Berlin this week. Source: the GIIN
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