Impact investing crosses $1T mark

The global market for impact investing is worth more than $1 trillion, according to new research by the Global Impact Investing Network (GIIN).

Its latest report estimated that total assets under management for impact investment strategies reached $1.164 trillion across 3,349 organizations as of the end of 2021.

“Our new estimate of a global impact investing market larger than one trillion dollars represents a significant psychological milestone for the industry, as it matures and grows in sophistication,” said GIIN CEO Amit Bouri.

“While this figure serves as a very positive sign for the industry, it is also a call for further action. Vast allocations of capital and an intentional focus towards generating positive impact are required right now if we are to achieve the UN Sustainable Development Goals by 2030 and to reach net zero emissions by 2050.”

In his foreword to the GIIN’s report, Bouri added that “all industry players have a role to play” in achieving impact investment goals such as reducing the impact of climate change and addressing social inequalities.

The report also included green bonds and corporate impact investing approaches for the first time.

On green bonds, the GIIN said this growing market segment had also recently crossed the $1 trillion mark, although only organizations that “hold green bonds as part of an investment strategy that includes impact intention” were included in its estimate.

Meanwhile, US companies currently hold approximately $2 trillion in cash reserves on their balance sheets, the GIIN reported. Shareholder pressure was resulting in some companies putting this money to work in impact investment projects.

“The sheer scale of cash reserves held by corporations along with their increasing focus to push for social change provides an attractive opportunity for the continued growth of the impact investing market,” the report stated.

Asset management companies account for the majority of assets under management, the GIIN reported, with 63%. This was followed by non-corporate foundations with 11%. Pension funds accounted for 2% of the total.

Half of the organizations included in the report were based in the US and Canada, accounting for 37% of total assets.