2020 Annual Impact Investor Survey – Global Impact Investing $715 Billion Market Maturing
14th June 2020 | Hong Kong
The Global Impact Investing Network (GIIN) releases the 10th edition of its 2020 Annual Impact Investor Survey, which finds the $715 billion global impact investing market maturing, even amid the worldwide pandemic.
“ Global Impact Investing $715 Billion Market Maturing “
The 2020 Annual Impact Investor Survey, the most comprehensive overview of the market, provides data and insights from the GIIN’s largest number of respondents ever: 294 of the world’s leading impact investors, who collectively manage $404 billion of impact investing assets.
(The Global Impact Investing Network (GIIN) is the global champion of impact investing, dedicated to increasing the scale and effectiveness of impact investing around the world.)
- Strong performance is motivating investment activity
- Sophistication of impact measurement and management practice
- Interest in key sectors and geographies
- Growth marked by 17% compound annual growth rate (CAGR) among repeat respondents
1. Strong Performance is Motivating Investment Activity
One critical driver of market growth is the industry’s performance – in both impact and financial terms – over time. 80% of respondents report meeting or exceeding their financial expectations
In terms of impact performance, 99% of respondents noted that they have met or exceeded their expectations since inception.
2. Sophistication of Impact Measurement and Management Practice
At the cornerstone of impact investing is the ability to translate intention into impact results. Impact measurement and management (IMM) practices enable impact investors to demonstrate real results and ensures accountability against impact washing. IMM practices now reflect greater sophistication and strategic use of tools.
Despite this, as the market matures, opportunity still exists for greater depth and refinement, especially for impact performance comparison and verification of results.
3. Interest in Key Sectors and Geographies
Top sectors to which respondents allocated capital were energy (16%), followed by financial services (excluding microfinance), with 12% of sample AUM.
The majority of capital is allocated to developed markets (55%), with the top region of investment being US & Canada (30%). Top asset classes are private debt, comprising 21% of the sample AUM, while public equity accounts for 19%.
4. Growth Marked by 17% compound annual growth rate (CAGR)
Among repeat respondents to the GIIN’s 2016 Annual Impact Investor Survey (2015 year-end data) and this year’s survey, aggregate AUM grew from $52 billion to $98 billion (17% CAGR).
Views of COVID-19 Impact on Investment Activity
Participating investors were also invited to share early reflections on the effects of COVID-19 on investment activity and outlook. Of the 294 respondents to this year’s survey, 122 offered specific perspectives on how COVID-19:
View on Investment Allocation
While investment activity vacillation is to be expected in the face of COVID-19, 57% of respondents indicated that they are ‘unlikely’ to change the volume of capital they had planned to commit to impact investments in 2020. While 20% are at least ‘somewhat likely’ to commit less capital than they had planned, 15% are ‘likely’ to commit more capital than planned.
View on Returns
Almost half of respondents expect impact performance in line with their expectations, and 18% expect portfolios to outperform on impact. Sixteen percent expect underperformance on impact while 46% expect underperformance against financial expectations.
Dean Hand, GIIN’s Director of Research:
Within the context of the broader impact investing market, the 2020 Annual Impact Investor Survey only describes the assets of a respondent sample of 294 investors, and therefore does not represent the full market size. This year’s report, however, also includes an update to the market sizing figure provided in April 2019. “Last year, the GIIN took on an unprecedented effort to estimate the total size of the impact investing market. This year’s updated estimate of USD $715 billion improves upon the rigorous methodology of its previous figure with a strengthened database that includes over 1,700 impact investors.”
Amit Bouri, Co-Founder and CEO of the GIIN
“The GIIN released its first Impact Investor Survey in 2010, amid the early aftereffects of the financial crisis. As we launch the 10th edition of our flagship report, we find ourselves at a time where the world is once again facing unprecedented challenges. Over the past decade, we have seen incredible growth and increased sophistication in impact investing. Despite challenges or perhaps because of them, many investors have, and will continue to turn to impact investing to contribute to social and environmental solutions. Investment capital has an important role to play in driving positive impact for our communities and planet, and I believe we’ll see even greater possibilities for what impact investing can achieve, in this moment, as well as in the years ahead.”
2020 Annual Impact Investor Survey
The 2020 Annual Impact Investor Survey is the 10th edition of the GIIN’s flagship report, which provides the most comprehensive overview of the impact investing market. This edition captures data from 294 of the world’s leading impact investors—the most Annual Survey respondents ever—who collectively manage USD 404 billion of impact investing assets, representing an important subset of the USD 715 billion global impact investing market.
The report looks at respondents’ investment activity during 2019 and their plans for 2020, market developments over the past decade, and challenges facing the market going forward. Respondents also shared insights on how COVID-19 might affect their activities.
The report also includes:
- An updated market sizing analysis, which estimates the current market size at USD 715 billion;
- Trends analysis of 79 repeat Survey respondents, to show changes and trends over time;
- Insights on topics such as climate investing, catalytic capital, the evolution of impact measurement and management practices, and policy developments over the past decade.
- The impact investing industry remains diverse
- Impact investing has grown in depth and sophistication over time
- Impact measurement and management practices have matured, but opportunities for refinement remain
- Impact investors hold a positive outlook for the future despite headwinds
About the Global Impact Investing Network
The Global Impact Investing Network (GIIN) is the global champion of impact investing, dedicated to increasing the scale and effectiveness of impact investing around the world. Impact investments are investments made into companies, organizations, and funds with the intention to generate positive, measurable, social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets and target a range of returns from below market to market rate, depending upon investors’ objectives.
The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry.
World Economic Forum – Impact Investing
2019 GIIN Investor Forum: Welcome Remarks by GIIN CEO Amit Bouri
Wired – How Tesla Builds Electric Cars
Schroders: Sustainable Investing
Caproasia.com | The leading financial website for financial professionals, professional investors and HNW investors. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quicklinks: Caproasia Access | TFC | Caproasia | Jobs