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Impact investment ‘developing rapidly’, says UKSIF report



A new report from the UK Sustainable Investment and Finance Association (UKSIF) claims that the concept of impact investing has been widely embraced by the industry.

The study, titled The Future of Investment: Impact Investment, collates the perspectives of professionals from across the investment and finance sectors.

Geoff Burnand, co-founder of Investing for Good, said, “One distinct characteristic of impact investments is their intention to address social and/or environmental challenges. They can be made in both developed and emerging markets and seek either sub-market or market financial returns.

He added, “The criteria to evaluate the positive social and/or environmental outcomes of investments are an integrated component of the investment process.”

Meanwhile, James Vaccaro of ethical bank Triodos claims in the report that the main areas of growth within impact investing include renewable energy, sustainable agriculture and health and social care.

Although impact investing is on the rise, the report authors are under no illusion that the task ahead is significant. They identify certain barriers to growth, including the British tax system, but praise the government’s support of impact investing through the ‘Big Society’ concept.

Gavin Francis, managing director of social investment research firm Worthstone, added, “I believe social impact investment in 5-10 years’ time will be a part of mainstream financial planning and a well-used strategy for wealth deployment by many private investors. We will have established and consistent metrics for measuring impact and the ability to evaluate and report the value delivered through the use of capital invested in this way.”

A recent survey by the financial development firm CFA Institute found that less than half of industry professionals were aware of impact investment.

Further reading:

66% of investment professionals unaware of impact investment

Investment firms must build a culture where ethical practices are valued

Impact investment organisation provides guidelines for governance

Cameron: ‘social investment can be a great force for social change on the planet’

Impact investment to grow by $1bn in 2013