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‘Vibrant’ impact investment market set for growth in 2014



The growth of the impact investment market will continue this year, according to a new survey that found 125 of the world’s largest participants expect to commit 19% more capital to such investments in 2014 than in 2013.

Impact investment is defined as investment where capital is provided to help tackle social or environmental problems while also generating a financial return. 

The 2014 edition of the JP Morgan and Global Impact Investing Network (GIIN) annual impact investor survey questioned leading impact investors who collectively manage $46 billion (£27.2 billion) in impact investments, of which 70% is invested in emerging markets and 30% in developed markets.

Some 91% of investors surveyed reported that they had reaped returns in line with or exceeding their expectations, while 99% were satisfied with the social or environmental impact the investments had made. 

Also amid greater government support and the launch of new products and funds, the survey reveals that respondents expect to commit a further $12.7 billion (£7.5 billion) this year, up from $10.6 billion (£6.3 billion) in 2013.

Fundraising targets have increased too, up to $4.5 billion (£2.7 billion) from the $2.8 billion (£1.7 billion) raised last year.

The report concludes that its findings prove that the impact investment market is transitioning from “a proof of concept phase to a growth phase”.

Yasemin Saltuk, a co-author of the report and director of Research for JP Morgan Social Finance, said, “From the results, we see the rise of a vibrant impact investing marketplace, where investors are targeting a wide variety of social, environmental and financial objectives and finding themselves satisfied with the results. 

“As collaboration between investors, governments and other key participants continues in 2014, we remain optimistic about the growth and development of the practice.”

Meanwhile, Amit Bouri, managing director at the GIIN and another co-author, added, “Overall, we see an increasingly sophisticated global impact investing market, supported by growing investment track records and high-level collaboration among governments and major investment institutions.” 

A number of recent surveys have found that an increasing proportion of investors are considering the social and environmental impact of their investment choices.

One study from ethical bank Triodos found that 3 million investors could consider impact investment in 2014.

Speaking to Blue & Green Tomorrow recently, Jennifer Kenning, director of wealth management and spearhead of impact investing at US wealth management firm Aspiriant, argued impact investment could become a trillion-dollar industry by the end of the decade. 

Photo: Julien Harneis via Flickr

Further reading:

JPMorgan Chase launches conservation impact investment initiative

Bloomberg Philanthropies announces $5m impact investment in solar lamp business

EY survey: majority of institutional investors considering sustainability

Why impact investment could soon be a trillion-dollar industry

Report ‘de-risks’ impact investment to open sector up to mainstream