Spain’s impact investments continue upward trajectory to reach €3.3bn

Impact investment in Spain continues to grow, with the latest figures showing a total of €3.3bn in the marketplace. Alongside this, the country’s new impact investment wholesaler is about to open for business, and the first social impact bond will swing into action during 2025.

On Monday, SpainNAB, the country’s national advisory board on impact investment, published its latest figures at its annual conference, the fifth ‘Camino al Impacto’ (Road to Impact), which was held in Madrid. 

The Spanish figures come a week after the UK's social impact investment market was calculated at £10bn (approximately €11.9bn) at the end of 2023, by Better Society Capital. The UK impact investing market is one of the most mature in the world.

Presenting the report, La Oferta de Capital de Impacto en España en 2023 (The Supply of Impact Capital in Spain in 2023), published with Esade Center for Social Impact, José Luis Ruiz de Munain, director general of SpainNAB, said: “The report reveals some very promising data.”

At the end of 2023, the impact assets under management in Spain totalled €3.3bn. The report stated: “The data shows the strength of the sector in our country, which combines the stability of impact finance from banks with significant growth rates in impact investment.”

Speaking at the event, Ruiz de Munain (pictured top) focused upon €1.52bn of direct impact investment, which excludes €1.74bn of finance from six banks and financial services cooperatives.

The €1.52bn has grown by 135% since 2020, due to new funds from existing fund managers as well as new fund managers entering the market. 

For the first time this year, the researchers also identified €84m in indirect impact investments, which aren’t included in the total.

Ruiz de Munain pointed out that private impact funds had pushed forward the growth of the marketplace, with a 32% growth on year before, and 100% growth the year before. This segment is now made up of 18 fund managers across 30 funds. 

However, he also highlighted the importance of funding from a total of 15 foundations across 27 investment vehicles. Ten new investment vehicles had been developed during 2023, and the total funding had increased by 10%.

Impact investments under management in 2023 and growth rates. Source: SpainNAB

At the same time, SpainNAB published its first research into what investees need. La demanda de financiación de impacto en España en 2023 (The Demand for Impact Financing in Spain in 2023) is based on an analysis of 850 organisations. 

Ruiz de Munain also flagged the importance of avoiding impact washing. He said: “As the number of impact investors grows, it becomes more urgent to have a mechanism that distinguishes impact investment from other sustainable investment strategies.” So, after working with more than 70 of SpainNAB’s stakeholders, the organisation has published its first code of good practice for impact investment, Código de Buenas Prácticas de la Inversión de Impacto. 

“A key element in the growth of any industry is to establish clear, stable, agile and incentivising frameworks for action,” said Eugenio Solla, president of SpainNAB. “At SpainNAB, we can and will contribute to the advancement of the creation of regulatory and fiscal frameworks that facilitate the channelling of public and private capital towards impact investment.”

Impact investment wholesaler on the cusp of opening

At last year’s GSG Global Impact Summit, held in Malaga in October, Spain announced that it would launch its own impact investment wholesaler (the equivalent of the UK’s Better Society Capital). The Fondo de Impacto Social (FIS) or Social Impact Fund will be managed by Cofides, which was originally created in 1988 as Spain’s development finance institution but which now has a wider remit, and will be endowed with €400m from the government. 

• Read more: Spain launches €400m impact investment wholesaler as market booms

The FIS was formally approved by the government in June and, As part of the process, Spain included for the first time a definition of impact investment in its legislation.

Speaking on Monday, the president of Cofides, Angela Perez, said she expected that the FIS would be operating towards the end of this year. She said: “The  Fondo de Impacto Social aims to support the impact economy and strengthen the social entrepreneurship ecosystem.” To do so, it would focus on “attracting private investors, increasing the size of the market and professionalising the sector”. 

She added: “It will invest in profitable projects with a clear intention of contributing to the solution of neglected social and environmental challenges that generate a measurable impact.”

The conference also heard about Spain’s first social impact bond (known as a contrato de impacto social or CIS in Spanish). Called ‘Málaga No Caduca’, it will be based in Málaga in the south of Spain and aims to combat food waste and food insecurity among vulnerable families. It is expected to run from 2025 to 2030. 

Marking the fifth year of SpainNAB, Ruiz de Munian, who is soon stepping down from his role said: “It has been a pleasure to walk with all of you on this journey towards an impact economy that is more just for people and planet.”