There is no longer any doubt that the impact investments are here to stay. Today, they are gradually occupying the agenda of businesspeople, governments and, of course, investors. But, let's be honest, if there was an opportunity, you would, traditional financial market investor, would make applications in the market impact business?
If it depended only on numbers, perhaps the answer would come quickly. According to the 2020 edition of Global Sustainable Investment Review, published by The Global Sustainable Investment Alliance, the assets of sustainable investment had a growth of 15% in the period 2018-2020, upon reaching the US$ 35.3 trillion in the five major global markets (Europe, the United States, Canada, Australia, New Zealand and Japan). In the same period, total professionally managed assets grew to US$ 98.4 trillion. But if a buoyant global market is not convincing enough, we present five reasons for you to change your mind.
Listed below are the five reasons taken from research carried out in 2020 with 294 of the largest impact investors of the world and which was organized by Global Impact Investing Network (GIIN) with the objective of identifying how this investment market is developing.
1. The impact investing industry remains diverse
Through research, we concluded that the small investors are the majority, emerging markets (such as sub-Saharan Africa, for example) attract a lot of interest and the largest allocation of capital has been directed towards private debt assets. Social and environmental impact are preferred as a performance target and there is wide use of them SDGs such as performance measurement and management. On average, respondents target eight different themes aligned with SDGs, reflecting the diversity of its impact objectives.
2. Impact investing has grown in depth and sophistication over time –
Investors’ perception of growth indicators and market developments over the past five years has changed their motivations for committing their capital and determining the allocation of their investments. Notably, most see the market is growing continuously. Among the sectors preferred by impact investors they are water, sanitation and hygiene, food, agriculture and health, respectively. Finally, 99% of the investors surveyed consider that their capital contributions met their impact performance expectations. And 88% estimate that impact investments met their expectations of financial return.
3. Impact measurement and management practices have matured and opportunities for refinement remain
– Impact measurement and management practices have evolved over the last decade and now reflect an increasingly strategic use for different purposes and different stages of the measurement cycle. The most commonly used management resources are the SDGs, the IRIS Metrics Catalog, the IRIS+ Core Metric Sets, and the five dimensions of the Impact Management Project impact convention. But the market points to a growing standardization, which will facilitate the access and use of this type of tools.
4. Impact investors have a positive outlook for the future despite headwinds –
You investors Investors consider that there are financial and impact risks to their portfolios. There was even a different perception of risk due to COVID-19. But this perception was directly related to the geopolitical and economic context of each investor. Areas most affected by the pandemic generated more pessimistic reactions. Despite this contingency, impact investors remain relatively positive about their future performance and say they want to contribute to reshaping financial markets so that they become more inclusive and sustainable.
5. The ultimate purpose
The community of impact investing global can help build a inclusive, more resilient and much more sustainable future.
Want to be a part of it?
At Sitawi every organization that is selected to capture by Crowdlending Platform for Positive Impact goes through a deep analysis which aims to validate 4 main pillars: recognized impact, business execution capacity, payment capacity and ethical fiber. Thus, all businesses that participate in the Crowdlending Rounds are recognized by us as positive impact business. Furthermore, through in-depth analysis, the team at Sitawi approaches the reality of entrepreneurs, addressing better points of support to be developed by the monitoring team, which gives greater security to investors who support the organization.
Be a positive impact investor! Support organizations that promote your values and principles.
