Earlier this month, the Global Impact Investing Network (GIIN) released the 2020 Annual Impact Investor Survey highlighting some of the progress of impact investing over the past ten years. Now in its 10th edition, the survey features data and insights from more than 290 impact investors, that collectively represent USD $404 billion of impact investing assets out of the total USD $715 billion impact investing global market.1 We have highlighted below some of the survey’s key findings:
The Impact Investing Industry Remains Diverse
- Over 46 countries are represented in GIIN’s 2020 survey with respondents investing in both developed and emerging markets.
- Out of the 294 respondents, two thirds are assets managers with 61 percent focus solely in impact investing.
- Although the different use of asset classes remains the same as 2019, they still saw a varied use of them with private debt, public traded debt, and private equity being among the three highest asset classes used by number of transactions.
- Lastly, with a vast majority of respondents aligning their investments with the sustainable development goals, impact investors target on average eight of the 17 SDGs. Nearly 75 percent of respondents targeted Goal 8: Decent work and economic growth.
Impact Investing Continues to Grow
- When asked about the stages of industry evolution of impact investing, no respondent selected “declining”, and a vast majority see the market as growing steadily.
- The area with the highest significant progress in the industry was on research on market activity, trends, performance, and practice. Other areas that investors seem to see a significant progress include sophistication of impact measurement management practice, professionals with relevant skill sets, and common understanding of definition and segmentation of impact investing market.
Impact Measurement and Management (IMM) Practices Have Advanced, but it Still has Room for Improvement
- Eighty nine percent of impact investors now use external systems and frameworks for IMM, with 73 percent using the SDGs as metrics, compared to 62 percent from last year’s survey. 2
- Yet, 48 percent still point that sophistication of impact measurement and management practice is an area of significant challenge for the years to come. Impact investors are mostly concerned about impact washing, and the inability to demonstrate and compare impact results.
COVID-19 Affects Impact Investing
- Many respondents utilized the 2020 Annual Impact Investor Survey to share their plans in addressing the pandemic and the future of impact investing. Most are choosing to either maintain or even increase capital toward impact investment in 2020, and only 20 percent indicated they are likely or very likely to decrease capital. Many impact investors also emphasized the importance of impact investing in times like these where marginalized and underserved communities are impacted the most.