Impact Investing

Global Impact Investing Network Issues Report on the Market Size

The Global Impact Investing Network (GIIN) recently issued a report on the market size for impact investing. The report discovers how many investors wish to invest what amount of their money in ways that will do good not only for the planet but for the human social structures it hosts, and to do well by increasing the principal.

Authors have worked from a database of more than 1,340 organisations across the world who manage assets with either social or environmental impact. The amount of the assets invested exceeds $502 bln. Most of the organisations are relatively small and are managing less than $29 mln. Still, there are the behemoths of the field managing upwards of a billion each.

Amit Bouri, who is the CEO of GIIN, optimistically says –

“Around the world, people are shifting their attitudes about the role capital should play in our society-from building stronger communities to mitigating climate change globally.”

Numbers Matter, Why?

An assessment of the current market size, with an evaluation of next year’s size, is what gives a sense of the rate of the entire growth. Besides, because a gross number of this is proven helpful for one develop an understanding of the total impact that “impact” as a movement has. Also, it might help differentiate this particular kind of investing from other sorts which sound misleadingly similar, notably ESG investment.

The authors of the report include GIIN Research Senior Associate, Hannah Dithrich, GIIN Research Director and Abhilash Mudaliar. They collectively write that they are working with a database taking in a global group of investors, mostly via not exclusively from the world’s most developed parts. A majority, which is about 58%, of those investors, are in the United States and Canada. Another large chunk is of 21% including Northern, Southern, or Western Europe. The remaining 21% is dispersed just about everywhere.

The Exact Methodology

How did the Global Impact Investing Network come up with the headline $502 bln? Mudaliar and Dithrich address this question at a reasonable length. They started by making a list of the impact investing firms, drawing upon networks like the Mission Investors Exchange and the Indian Impact Investors Council. The list grew even more including more than 1,340 firms-until it became quite big to be dignified with the term called “database.”

After that, the authors, as well as their research team, gathered AUM data from the names on that list. Global Impact Investing Network didn’t decide which investments should be considered as “impact’ and which should be excluded. It merely relied on self-reporting for the same. They refrained from counting any indirect investments to avoid all the double-counting.

The team measured the AUM for those firms from who they couldn’t get recorded numbers.

At last, the team “measured the proportion of the full universe captured.”

From this, they extracted not only that $502 bln but also the fact that 1/4 dollars in invested assets … now consider sustainability principles, which amounts to $13 tln.

They wrapped up all this way –

“There is great potential for these investors, who have already aligned their capital with their values, to more intentionally use their investments to fuel progress through impact investments. The growing consideration of social and environmental factors in investing is also a signal of a larger shift in the global financial markets-an increasing number of people are recognising that their money should do more than just make more money. Their investment can-and should-also seek to fuel meaningful, sustainable social and environmental impact.”