According to a new benchmark report from Impact Investing Australia and the UNSW Centre for Social Impact, the sector is outperforming expectations on both financial returns and measurable social and environmental outcomes.
The report, Benchmarking Impact: Australian Impact Investor Insights, Activity and Performance Report 2025, shows a strong flow of capital into the sector, significantly exceeding the market's own projections.
The research surveyed active and prospective impact investors representing over $345 billion in funds under management and analysed 197 publicly-available impact investment products.
It revealed the number of publicly-available impact products has increased by 77 per cent since 2020 – and the value of impact funds has more than quadrupled.
Meanwhile, the value of GSS bonds has seen an even more dramatic 8.5x increase, now representing the largest share of the market at $145 billion.
Some 80 per cent of survey respondents said the financial performance of their impact investments met or exceeded expectations and 84 per cent reported that the social and environmental impact generated by these investments also met or surpassed their expectations.
The report also reveals that while the market is thriving, there is a clear call for more government support, with almost 90 per cent of investors believing the government could do more to stimulate growth through measures like tax incentives, wholesale funds and capacity-building programs.
Impact Investing Australia CEO David Hetherington said the report is the first detailed analysis of the Australian impact investing market in five years.
“We can now confidently say that impact investments are delivering on their promise of generating both a positive, measurable impact and a competitive financial return - but Australia’s impact investing market remains underdeveloped relative to its peers.”
Hetherington believes federal leadership in establishing a wholesale co-funding mechanism that provides cornerstone investment alongside private and philanthropic capital would accelerate a deeper, more efficient impact investing market.
“This would deliver long-term productivity gains by unlocking significantly greater private investment in areas like inclusive employment, affordable housing and regional development.”
Director of the UNSW Centre for Social Impact, Professor Danielle Logue, said impact investing recognises that the challenges facing society are too large and complex to be solved by any single actor - and encourages innovative approaches that generate measurable social and environmental outcomes alongside a financial return.
“This study shows the Australian market has not only met but exceeded projected demand for impact investing products by almost 60 per cent since 2020, highlighting the growing appetite of investors willing to deploy capital at scale for products with purpose.”
Looking ahead, 60 per cent of investors are confident that impact investments will continue to deliver at or above market-rate financial returns in the future.
While a large majority of investors (85 per cent) track impact during an investment, the report highlights a significant lack of consistency in Impact Measurement and Management (IMM) frameworks.
The report notes a strong interest in blended finance, with over 60 per cent of active investors having participated in these structures.
However, investor appetite for investing in emerging markets remains limited, with only one-third of respondents expressing interest, citing a lack of market demand and internal organisational constraints as key barriers.
