Stockholm (NordSIP) – Despite a turbulent global economic landscape, impact investing continues to demonstrate resilience, according to the Global Impact Investing Network’s (GIIN) “State of the Market 2025” report. Published during the GIIN Impact Forum annual conference, taking place this week in Berlin, the survey reveals a growing market, albeit one facing increasing pressure and a concentration of capital in “safer” investment havens.
Overall, the report describes an evolving impact investing market that is demonstrating resilience in the face of global economic uncertainty, while warning that medium-term growth trends might hide a recent pullback from the market.
The Impact Investing Market in 2025
The headline figure from the GIIN survey was that the market grew at a compound annual growth rate (CAGR) of 21% over the past six years.
Amit Bouri, Chief Executive Officer and Co-Founder of the GIIN, struck an optimistic tone in his introduction to the report, noting that “impact investing is not simply surviving — it is advancing. And the choices we make now, as a global community of practitioners, will define not only the future of the industry, but the wellbeing of generations to come,” Bouri says.
Taking an overview of the impact investment space, participants remain overwhelmingly concentrated in specialised asset management firms and in high income countries, with Europe and in the USA taking the lead to collectively account for 72% of the market.
According to the GIIN, investor behaviour is also undergoing an adjustment. “The percentage of investors targeting market-rate returns has increased over the past six years. Most impact capital remains concentrated in high-income countries, particularly in Northern America and Europe, despite the growing opportunities in emerging markets. Additionally, investors are increasingly shifting towards ‘safer’ stages of growth, with mature, publicly traded companies experiencing the greatest increase in impact AUM — perhaps signaling aversion to uncertainty. (…) Ultimately, the move toward ‘safer’ investments reflects caution, not urgency,” the report explains.
“Investors are targeting sectors where capital is most needed: inclusive financial services, healthcare, housing and clean energy. These investments generate meaningful outcomes, especially for people with lower incomes and limited access to essential services. Beyond this steady growth, there are signs of momentum. The majority of this year’s survey respondents plan to increase investments in climate solutions, water and sanitation, and sustainable agriculture in the years ahead. These decisions aren’t driven by market forces alone. Many investors are motivated by mission alignment, environmental goals and social progress,” Bouri argues.
Impact Investing Capital Pullback?
Although the growth over the last six years signals sustained confidence, a closer look reveals potential strain, with the overall volume of capital deployed decreasing by 30% among repeat respondents in the last year, hinting at a possible capital pullback.
Considering the challenges faced by investors can help understand the drivers of this recent change. According to the report, 62% of impact investors believe impact-washing is a challenge to the industry, but only 10% believe it is a challenge to their own organisation. The top data collection-related challenges cited by impact investors in 2024 were time (93%), cost (92%) and verification (88%). The top macroeconomic challenges cited by impact investors were inflation (91%) and interest rates (88%), followed by general economic downturns (88%) and climate change (81%).
Political and geopolitical forces also played a role. 75% of U.S.-headquartered investors noted an increased ESG backlash compared to 52% of non-U.S. investors. While 62% of European investors reported challenges from armed conflict, which was greater than all other regions (31%), they have decreased their housing investments by 52%.
“This has been a year of rapid change and many challenges, but it has also revealed new opportunities for bold leadership and meaningful action. Across the impact investing community, we’ve seen leaders rise to meet this moment, directing capital toward solutions that improve lives and build a more sustainable future,” Bouri says.
