More

    Impact Investments Exceed US$1.5 Trillion

    Share post:

    Stokcholm (NordSIP) – On the margins of the 2024 GIIN Forum taking place between October 22nd and October 24th in Amsterdam, the Global Impact Investment Network (GIIN) has published a report aiming to measure the Size the Impact Investing Market.

    Based on the GIIN’s research, the global impact investing market is now estimated to be US$1.571 trillion in assets under management (AUM) overseen by over 3,907 organisations. This figure, up 35% from the US$1.164 trillion estimate in 2022, “indicates growing mainstream acceptance of impact investing, even in the face of global unrest, inflation and increasing impacts of climate change,” the GIIN argues. This represents a 21% compound annual growth (CAGR) of the total impact investing market since 2019. The average investment portfolio held US$986 million in impact AUM. The median investment portfolio held US$42 million.

    - Partner Message -

    “From building housing for cost-burdened families to making our air and water cleaner, impact investors don’t just seek financial returns; they create a more equitable and sustainable world for our children and grandchildren. Impact investing is a movement of people who believe that capital can and should solve our global problems (…). Together, we can shape and secure a future where all people have access to good jobs, economic mobility and a healthy world to live in. We look forward to working with you towards these goals,” Amit Bouri, CEO and Co-Founder of the GIIN says.

    Who and Where?

    According to the GIIN’s estimates, investment managers represent almost 60% of impact investing organisations, the AUM is more evenly distributed between this group, pension funds, insurance companies and banks.

    At the same time, impact investment organisations continue to overwhelmingly be based from Europe and North America. As a result, it is not surprising to find that only 24% of impact investment funds flow towards emerging markets, where they are most needed.

    Speaking to the press following the publication of the report, CEO and Co-Founder Amit Bouri and Dean Hand, Head of Research at the GIIN did however notice that capital flows are growing faster than the number of participating organisations.

    Methodology

    To calculate these figures, the GIIN research team built a comprehensive database of direct impact AUM managed by thousands of impact investing organisations. By doing this, the GIIN argues it was able to eliminate duplicates and indirect investments, and sample the data to make additional estimates in order to reach a well-informed estimate of the total size of the impact investing market.

    Indeed, the GIIN recognises that in building the dataset “it is reasonable to assume that the research team may not have captured all impact investing organisations making direct investments. Thus, it was assumed that 85% of the total impact investing market had been captured. The GIIN applied this coverage percentage to the sum of impact AUM values in the known universe to arrive at the GIIN’s final estimate of market size.”

    Accelerating Momentum for Impact Investing

    This report also contains insights into the main capital influencers on the impact investing market, statistics on impact portfolio sizes and snapshots into regional and related efforts in sizing the impact investing market. The full report also includes deeper insights into the research methodology and a list of organisations who contributed data to further this report.

    “The findings of this market sizing research underscore the accelerating momentum behind the impact investing industry. In 2024, impact investing is well-positioned to capitalise on this momentum as the urgency for action on social and environmental problems is mounting. The current pace of capital allocation towards the SDGs is far from sufficient to mitigate the worst effects of climate change and global inequality, but we can reverse this trend by engaging more investors, more capital and working together in new ways,” the GIIN concludes.

    - Partner Message -

    Nordsip Insights

    From the Author

    Related articles