Over 450 PRI signatories allocate $1.3trn to impact investments – new ‘market map’

New report is an attempt to bridge the gap between ‘mainstream’ and ‘impact investors’

More than 450 signatories to the Principles for Responsible Investment signatories allocated $1.3trn to impact investments worldwide in 2016, according to the PRI’s new ‘Impact Investing Market Map’.

The PRI Impact Investing Map is an attempt to bridge the gap between mainstream and impact investors and direct more capital to the UN Sustainable Development Goals (SDGs), says Kris Douma, the PRI’s Director of Investment Practices & Engagements, who led the initiative.

The Map’s estimated figure for impact investment from PRI signatories in 2016 compares to the $114bn by 209 investors reported by the Global Impact Investing Network (GIIN).

This reflects the broader approach the PRI is taking to what it terms ‘mainstream impact investing’ that does not necessarily require impact measurement and typically involves listed organisations and large privately-owned companies.

The GIIN cites impact measurement as a core characteristic of impact investing, alongside intentionality, a financial return and a range of return expectations and asset classes.Douma says: “People still identify impact investing with a niche market. So we have to make sure we get out of this terminology and have a much broader perspective of how investors can and will create positive real world impact.”

The Map contains details on 10 environmental and social thematic areas of impact investments and businesses that by their nature contribute to sustainability and the SDGs and also fit within traditional asset classes and can take capital at scale.

“It is a bit different from the traditional approach of impact investing which is usually quite illiquid investments,” says Douma. “But it is using the criteria of the impact world to help mainstream investors contribute to sustainability in their more liquid investment portfolios, so listed equities and bonds.”

The 10 themes covered are energy efficiency, green buildings, renewable energy, sustainable agriculture, sustainable forestry, water affordable housing, education, health and inclusive finance.

The Map was initially developed with 270 PRI signatories and will be refined and reviewed over time.

Other stakeholders involved include the GIIN, OECD and the UNDP (United Nations Development Programme).