The top challenges for the impact investment market is the lack of “appropriate capital across the risk/return spectrum” and impact measurement, according to the Global Impact Investing Network (GIIN) 2020 Annual Impact Investor Survey.
Investment consultants and a lack of accessible impact investment fund products were also cited as barriers.
In its 10th year, the GIIN survey analysed 294 impact investors who collectively manage $404bn.
It finds that 88% feel their impact investments meet or exceed their financial expectations, and 99% feel they have met or exceeded their expectations on impact performance.
Also, 39% of respondents cite “sophistication of impact measurement and management practice” as one of the greatest areas of progress over the past decade for the impact investment market.
But, at the same time, 48% cited impact measurement as a “significant challenge” for impact investing over the next five years.
It comes as the IFC releases, Growing Impact – New Insights into the Practice of Impact Investing, this week, in which it estimates that commercial “intentional” impact investment stands at $505bn. The GIIN estimates the total impact investment market stood at $715bn in 2019.
Adding on DFI impact investment, the IFC estimates the total size of the impact investment market stood at $2trn in 2019.
Last year, the IFC launched the Operating Principles for Impact Management, which currently have 97 signatories, including BlackRock, UBS Group and Axa Investment Managers.
The signatories are working to align impact measurement systems into a common core of metrics on themes such as climate, gender and direct jobs, says the IFC, which will improve the ability of investors to compare impact performance across funds and institutions.