Impact investing market tops $1 trillion mark

The size of the global impact investing market has now officially surpassed the $1 trillion mark, according to the Global Impact Investing Network (GIIN). The announcement was made at the GIIN Investor Forum currently underway in The Hague, Netherlands.

The figure, which is the central finding of the GIIN’s new 2022: Sizing the Impact Investing Market report, reflects an increasingly comprehensive measurement of impact investments globally and ongoing growth in the market.

The report also spotlights two major areas of development: green bonds and corporate impact investing practices. Since its inception in 2008, green bonds – a typical bond instrument where the proceeds are specifically used to finance or re-finance projects that are labelled as green – have become increasingly widespread among public and private institutions alike.

Meanwhile, shareholder pressure in recent years to invest cash reserves productively, coupled with stakeholder demands for corporations to help address major global challenges, has led to the rise of corporate impact investing. 

GIIN co-founder and chief executive Amit Bouri described the new market size estimate as a sign of the impact investing industry’s “undeniable momentum,” when revealing the number during his keynote speech at the forum.

The comprehensive estimate of market size is a foundational data point for the still-growing industry – allowing industry players to compare impact investing to related sustainability-focused investment approaches, track the volume of capital flows it, and evaluate the changing nature of the market itself.

“We now estimate the global impact investing market has grown to more than one trillion dollars. This represents a significant milestone for the industry as it matures and grows in sophistication,” said Bouri.

“While the market growth to $1.164 trillion serves as a very positive sign, it is also a call for further action. Investing more capital with an intentional focus to generate positive impact is required right now if we truly want to meet the UN Sustainable Development Goals by 2030 and achieve net zero emissions by 2050.”

“As responsible investing moves into the mainstream, in addition to their expectation that robust ESG principles are being applied to portfolios, many investors are also embracing impact investing, which seeks to produce direct benefits for people and the planet while generating market-rate returns,” said Amy O’Brien, head of responsible investing at Nuveen.

“We are so pleased to have sponsored this report, which demonstrates the growth in demand for impact investments we have seen from clients in recent years. We look forward to continue assisting our clients as they look for new ways to deploy capital while seeking to address some of the most critical sustainable development challenges of our day.”

The GIIN estimates that more than 3 349 organisations currently manage the industry’s $1.164 trillion in impact investing assets worldwide. The market sizing report also includes subsamples that revealed the:

• average impact assets under management, per organization, is $485 million; and
• median impact assets under management, per organisation, is $62.5 million.

“The results of this market sizing study should fill us with optimism and determination,” said Bouri. “We should be optimistic about the capacity of the market to enact positive change, and we must be determined to continue to grow the use of impact investing as a critical strategy to address the challenges of our time.”

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