The majority of impact investors said their investments have met their expectations for both impact (82 per cent) and financial (76 per cent) performance since inception, according to a report by the Global Impact Investment Network.
The report, which surveyed 229 investment stakeholders, including pension funds, insurance companies, fund managers and foundations, also found 50 per cent of survey participants made their first allocation to impact investing in the last 10 years, which it noted is indicative of the ongoing addition of new players in the space.
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As well, more than half of respondents target both social and environmental objectives. Another 40 per cent mainly focus on social objectives, while six per cent are mostly interested in environmental concerns. The majority (76 per cent) set impact targets for some or all of their investments, citing a number of reasons for doing so. These include to drive social/environmental impact management, to inform investment decisions and to hold investees and their own teams accountable to impact.
In making such measurements, 69 per cent of survey respondents used proprietary metrics or frameworks and 66 per cent used qualitative information. As well, two out of three investors also track their investment goals to the United Nation’s sustainable development goals.
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Those surveyed also indicated they see impact investing through several lenses, including gender issues (70 per cent) and climate change (72 per cent).
In seeking out the investments that have the most force, survey respondents also said they watch for impact washing to ensure companies aren’t trying to seem more serious about a given issue than it actually is. Most (80 per cent) agreed that greater transparency from impact investors on their strategies and achievements would mitigate the risk of mission drift. Third-party certification, a code of conduct for investors and principles to govern investor behaviour are also good solutions, according to the survey.
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