ImpactAlpha, June 15 – The Global Impact Investing Network launched its first survey of impact investors in the wake of the Great Finance Crisis. The network published its 10th survey last week in the midst of a global pandemic.
“If crisis exacerbates our most troubling trends,” writes the GIIN’s Amit Bouri, “I am convinced that it can also amplify our most encouraging trends.” Nearly 300 investors managing $404 billion in impact investing assets responded this year (just two dozen responded to the 2010 survey). Extrapolating to a dataset of more than 1,720 impact investors, the GIIN estimates the market at $715 billion, up from $504 billion last year.
Some impact investors are demonstrating resolve in the face of the COVID crisis (see, “Investors that demonstrate flexibility and patience prove catalytic in COVID crisis,”). But only 18 of 122 respondents said they will ‘likely’ commit more capital than planned in response to the pandemic. Almost 60% are ‘unlikely’ to change the volume of capital they plan to commit in 2020; another 20% plan to cut back commitments.
- The upside. Realized returns are strong across asset classes, with returns on emerging market investments on par with those in developed markets. Allocation growth appears strongest across Europe, east and southeast Asia and Latin America, as well as in water and sanitation, financial services, healthcare and food and agriculture. Impact investors have coalesced around the U.N. Sustainable Development Goals.
- The downside. Concerns about “impact washing” loom large; half of respondents called impact measurement and management a ‘significant challenge.’ Almost 40% do not yet independently verify their impact. Allocations among repeat respondents have grown least in sub-Saharan Africa, eastern Europe and central Asia and South Asia, as well as in microfinance and housing. Allocations to education and arts and culture have fallen since 2015.