Over the past five years the global impact investing market grew by 14% per annum, according to the latest market intelligence report from the Global Impact Investing Network.
This growth reflects a maturing market as more investors prioritise impactful strategies across sectors and geographies.
The report is part of the GIIN’s 2024 Market Intelligence Series, based on its 2024 Impact Investor Survey that captured data from 305 impact investing organisations, each of which manages more than US$10 million in impact assets under management or has made more than five impact investments.
The report provides insight on who these impact investors are, how they allocate their impact assets, their investment activity, impact measurement and management practice, areas of market development and, crucially, impact investors’ performance.
Impact investors demonstrate resilience and innovation
Since the term “impact investing” was first coined in 2009, the impact investing industry has evolved significantly.
Respondents to this year’s survey shared areas of perceived progress over the past five years, ongoing challenges in the industry and their views on macro-level issues affecting impact investing.
Chief research officer for the GIIN, Dean Hand, said “Impact investors have demonstrated resilience and innovation during 2024.
“They have increased their focus on climate adaptation and resilience, developed new and innovative investment vehicles, and fostered vibrant discussions around equity in the industry.
“As the impact investing sector grows, so does its capacity to tackle global challenges head-on.”
State of the Market 2024 highlights
The market intelligence report provides insights into the growth and demographics of impact investing, including capital allocation, investment performance, and evolving impact measurement practices for both newcomers and seasoned investors.
HIghlights include:
Steady growth in impact investing assets: At 14% compound annual growth over the past five years, there is continuous growth in the assets allocated to impact investing strategies.
The rise of equity-like debt and public asset classes: Investors are leveraging the unique features of these asset classes to derive value, indicating a strategic shift in how capital is deployed.
Satisfaction with financial performance despite unmet targets: Investors report high satisfaction with financial performance, even when targets are not met.
Key shifts in measurement and management of impact results: Investors are experiencing fragmentation in the choice of frameworks and metrics for measuring impact, likely influenced by evolving regulatory environments.
Despite this, over two-thirds of investors are incorporating impact criteria into their investment governance documents, signalling a significant shift towards formalising impact considerations in decision-making processes.
There is also a growing trend among investors to subject their impact management processes to third-party verification.
These developments are crucial for enhancing investor accountability and indicate a move towards more sophisticated measurement and management practices in impact investing.
You can read the GIIN’s State of the Market 2024 report here.