Investors Appetite for Impact Investing Could Be as High as $26 Trillion

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Gedung-gedung perkantoran di Sudirman Jakarta (KalderaNews/JS de Britto)
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WASHINGTON, KalderaNews.com – Investors’ appetite for impact investing—in which they seek to generate positive impact for society alongside strong financial returns—could be as much as $26 trillion, according to a new report issued by IFC, a member of the World Bank Group.

The report, Creating Impact: The Promise of Impact Investing, is the most comprehensive assessment so far of the potential global market for impact investing. As much as $268 trillion—the financial assets held by institutions and households across the world—is potentially available for investment.

BACA JUGA:

The report notes that if just 10 percent of this were channeled toward investments focused on improving social and environmental outcomes, it would go a long way toward providing the funding necessary to achieve the Sustainable Development Goals while also facilitating a shift to a low-carbon future.

The growing demand for impact investing partly reflects demographic shifts. According to Accenture, in North America alone, at least $30 trillion in wealth will be transferred in the coming decades from Baby Boomers to Generation X and millennials. Younger investors increasingly favor socially and environmentally motivated investment strategies—and they’re willing to invest larger amounts in them.

“More and more investors – including younger people – are demanding that their investments are channeled into funds that have positive impact for communities and the environment,” said IFC CEO Philippe Le Houérou to KalderaNews. “We have a historic opportunity to grow this market — and that’s good news for the planet and the communities around the world.”

In public markets involving stocks and bonds, the report estimates that investor appetite could be as much as $21 trillion. An additional $5 trillion could come from private equity, nonsovereign debt, and venture capital. Turning this appetite into actual investments will depend on the creation of investment opportunities and investment vehicles that enable investors to pursue impact and financial returns in ways that are sustainable. (JS)

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