Impact investing is gaining traction, with 56 per cent of institutional investors already invested in assets that are both financially rewarding and economically and socially positive, according to Impact Investing Australia.
In the 2016 Investor Report, Impact Investing Australia found that institutional investors and individuals are more commonly engaged in impact investing, with 56 per cent and 60 per cent respectively already actively invested.
“There is an undeniable and growing interest in impact investing – an investment approach that intentionally seeks to create both financial return and positive social or environmental impact that is actively measured,” the report said.
The report revealed that 41 per cent of total investors are actively engaged in impact investing.
Of the 59 per cent that are not active impact investors, 82 per cent are interested in the matter. Seventy per cent of investors believe impact investing will become a more “significant part of the investment landscape” over the next five years.
The report also found that while impact investing is likely to become more mainstream, the amount of funds allocated to applicable assets remains low.
Most investors who are active in impact investing have less than 10 per cent of their total assets under management allocated to such assets.
"More evidence of social impact is key for active investors to consider increasing their allocations to impact investments," the report said.
Moreover, in order for the discipline to continue on an upward trajectory, more “investable deals” are needed.
“Active impact investors require more investable deals, proven financial track record and evidence of social impact to increase their allocations to impact investment.”
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