Impact Finance Bulletin: Most people still don’t know anything about impact investing

This month saw a lot of debate in the UK impact bubble, but some news from Japan this week brings us a refreshing perspective on impact finance: what do mainstream consumers know and think about impact investing?

A new survey by the Japan Social Innovation and Investment Foundation (SIIF) reveals that more than a fifth of Japanese consumers have heard of impact investing, a record high since the yearly survey began in 2019. 

I’m not aware of other consumer surveys on impact investing (if you are, please get in touch to let me know). Research on the retail impact investing market usually focuses on the products available to consumers, and how big those investment funds are. Many surveys rather focus on investors – financial firms or large capital providers. But the SIIF survey is the only one I know that looks at what the broader population thinks, which is odd, as such information is essential if you want to encourage more people to invest into impact. 

The survey of more than 4,000 people reveals nearly 9% of consumers know what impact investing is about – a slight raise since 2019 – and 21% say they’ve heard the phrase before. Looking at it the other way around, this also means 79% of people have never heard about impact investing, and 91% don’t know what impact investing is about. This is in a country known for having a well-established and fast-growing impact investing market, where leading banks and pension funds are publicly committing to it. 

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There are caveats: what the researchers say are low levels of financial literacy training in the country (8%, according to the survey) might lead to lower knowledge about investing generally, so we shouldn’t draw hasty conclusions. Finding out where consumers stand on impact investing elsewhere in the world would be useful. 

But for now, the Japan figures feel like a good dose of reality-check to some people who have been arguing that the “impact investing revolution is now” for years: what we are witnessing is more akin to the slow progression of a practice that isn’t that easy to sell to mainstream consumers.

On our radar

• GSG Impact has started work on an “Impact Economy Index”, a new global benchmark to measure, compare and accelerate how countries enable impact across their economic systems. In partnership with academic institutions, the index will look at what policies are in place to support more impact, for example whether the country has an impact investing wholesaler. (I’ve been assured there will be no attempt at defining or sizing any ‘impact economy’, in case anyone is concerned.) 
• Pioneers Post will be a media partner at ChangeNOW, the yearly gathering of investors, entrepreneurs and social innovators building solutions to social and environmental challenges that will take place at the end of March. Organisers are expecting no fewer than 40,000 people this year, and it will be hosted in the (very big) Grand Palais in Paris. Tickets are here, and let me know if you are attending and want to say hi!

Top image: Freepik.