Impact investments worldwide break through US$1.5tn – 2024 GIIN report

The global impact investing market has reached US$1.571tn, managed by 3,907 organisations, at the end of 2023. This is more than double the size it was four years ago, according to the latest estimate by the Global Impact Investing Network (GIIN) published today. 

The GIIN’s CEO, Amit Bouri, revealed the figure this morning at the GIIN Investor Forum in Amsterdam.

Speaking to the 1,600 delegates, he said: “That’s a big number, and it’s packed with meaning. It means that $1.57tn are creating real world solutions that make people’s lives better. $1.57tn are bringing hope for a brighter future. $1.57tn are making healthcare more accessible, building more affordable housing, providing clean energy, supporting the farmers that feed us, regenerating our lands and oceans, creating good jobs and so much more.”

He added: “That’s why our work is so important. Every impact investment is a chance to deliver solutions. Every impact investment is a chance to prioritise what really matters, and every impact investment is a fighting chance to secure a more sustainable and equitable future for us, for our kids, for our ecosystems and for humanity. ”

The GIIN’s Sizing the Impact Investing Market 2024 report reveals a 35% increase on the 2022 figure – when the GIIN valued impact investments worldwide at US$1.164tn – and a 120% increase on the 2020 estimate which stood at US$715bn. 

Organisations repeatedly included in the survey since the GIIN’s first market sizing exercise in 2019 reported their impact assets under management increased at a compound annual growth rate (CAGR) of 21% in the past five years.

There is growing evidence that institutional asset owners… are beginning to reshape their portfolios, incorporating impact-driven investments as a strategic priority

In a foreword to the report, Bouri said: “While we still have a long road ahead – after all, the scale of the world’s problems determines the scale of the impact investing industry – there’s a lot of progress to honour.” 

The GIIN is a network of 400 impact investors in 60 countries, founded in 2009 with the mission to “increase the scale and effectiveness of impact investing around the world”.

The 2024 research reveals a shifting landscape in the profile of impact investors – with institutional investors now accounting for a major share of the market. Hardly present in the impact investing market two years ago, pension funds and insurance companies now manage 48% of global impact assets (more than US$750bn).

“There is growing evidence that institutional asset owners, in particular pension funds, but also insurance companies and sovereign wealth funds, are beginning to reshape their portfolios, incorporating impact-driven investments as a strategic priority,” the report says.

Pension funds and insurance companies together represent 18% of the total number of organisations investing in impact. Asset managers remain the biggest group of investors by type (representing 59% of investors, down from 63% in 2022), but their share of global impact assets under management has fallen dramatically from 61% to 27% in the past two years. Development finance institutions, which managed 27% of impact assets worldwide in 2022, this year accounted for only 6% of the global market. 

Researchers found that large investors in particular are fuelling the recent growth. Data collected for a subset of 1,593 organisations shows the average size of an impact investment portfolio was US$986m, while the median stood at US$42m – showing that, while most investors’ individual allocations to impact investing remains small, a few larger investors were investing substantially bigger amounts, considerably skewing the average upwards.

Institutional investors in focus

The increased involvement of pension funds in impact investing is a reason to be optimistic for the future, according to Marc Moser, head of impact at impact investing firm Lightrock. Quoted in the report, he says he expects the market to continue to grow based on “steadily rising demand from an increasingly diversified investor base, particularly larger institutional investors”.

But a game-changer will be to involve institutional investors at scale, given their size and influence, the researchers argue.

The report notes that just a fraction of their US$80tn in assets under management worldwide would be enough to plug the estimated US$4.2tn “SDG gap” – the amount needed each year to achieve the UN Sustainable Development Goals, according to UN research. They are also able to make long-term investments, a crucial tool to invest in solutions for sustainable growth, notably in developing countries, the report states. 

North-South divide

The vast majority of impact investments come from the Global North – among 1,475 organisations reporting their location, 45% come from Northern and Southern Europe and 34% from the US and Canada. In terms of volumes managed, investors in the Global North managed 95% of impact investments globally, leaving 5% managed in the Global South.

The GIIN defines impact investing as “investments made into companies, organisations and funds with the intention to generate positive, measurable, social and environmental impact alongside a financial return”. 

The research is based on the GIIN’s own data as well as information provided by third party investor networks and data gathering organisations including impact investing consultancy Phenix Capital Group and private markets data provider Pitchbook. Regional networks that partnered with the GIIN include the African Venture Philanthropy Association, Asia’s impact investing network AVPN, a Canadian consortium of impact investors, the Impact Investing Institute of the UK, Investing in Women and Latimpacto.

Other regional initiatives have recently released impact market measurements at country level, including the UK (where impact investments reached £77bn last year), Spain (€3.3bn in 2023) and Japan (¥11.5tn (US$72bn) in 2023).

• Read more: UK impact investments reach £77bn at the end of 2023, Impact Investing Institute reveals

Create your own user feedback survey