The Bertha Centre for Social Innovation an Entrepreneurship at the University of Cape Town has released the third edition of its African Investing for Impact Barometer, a compelling snapshot of strategies deployed in Kenya, South Africa, and (for the first time) Nigeria, to combine financial returns with positive impact on society and the environment.
These so-called Investing for Impact (IFI) strategies include ESG integration, engagement, screening, thematic investments and impact investments (where the social or environmental objectives, unlike with thematic investments, are formally part of the strategy).
The survey covers data from 1,400 funds across the three countries, highlighting growth in practices as well as a scoring system identifying Hot Leaders for various strategic approaches.
South Africa is ahead in terms of IFI Asset Size, with 70 percent of funds managed implementing at least one IFI strategy. Kenya is second (48 percent) and Nigeria third (23 percent), as measured on overall assets deploying at least one IFI strategy.
Across the three countries, total assets in ESG integration were $490 billion, $474 billion for investor engagement, $148 billion for screening, $31 billion for thematic investment, and $12 billion for impact investments.
When measured against quality impact scores, as determined by the survey’s own methodology, fund managers implementing strategies with lower assets (screening, thematic and impact investments) were better able to demonstrate their impact.