€190bn European impact investing market revealed – Impact Europe report
The European Impact Investing Consortium’s latest data shows huge growth in impact assets under management, but flags that it represents only 2.5% of what could be invested for impact across Europe.
The European impact investing market now stands at €190bn, according to new research published during Impact Europe’s Impact Week.
Around 1,000 delegates gathered this week in Bilbao, in the Basque region of Spain, for the annual event of Impact Europe, the membership organisation for impact investors across the continent.
The new figure of €190bn – which represents private direct and indirect investments in unlisted assets – shows significant growth from the €80bn identified in the first study of this kind which was published in 2022.
The research, The Size of Impact, was carried out by the European Impact Investing Consortium, which aims to bring a consistent approach to measuring the size of the market. It brings together data from 431 organisations in 21 European countries (including the UK), compared with 285 organisations in 2022.
We can see on the horizon institutional investors coming with big assets, giving us hope for scale
The Consortium emphasised that, while the growth of the market was to be welcomed, it still only represented 2.5% of the €7.6tn that the researchers considered funds that would be eligible for impact investing in Europe.
Impact Europe’s CEO Roberta Bosurgi emphasised this during the opening plenary on Thursday. However, she pointed to some positives too. “The growth is impressive and more players have stepped into the impact space,” she said. “We can see on the horizon institutional investors coming with big assets, giving us hope for scale.” She added that philanthropy should commit more of its funding to impact. “We also need more catalytic, patient, risk-tolerant capital.”
The researchers highlighted that the impact investing market in Europe is currently led by the UK, the Netherlands and France, which hold the largest shares of assets under management. Italy, Denmark, Belgium and Spain are making notable contributions, they pointed out. And Turkey, Portugal and Greece are nascent markets.
The top European countries for impact investing, according to market size. Source: The Size of Impact
The research found that 45% of the impact capital is directed outside Europe. While in the 2022 report, the funds were evenly distributed among Asia, Africa and Latin America, now there is more of a focus on Africa (18%), followed by Asia (12%) and Latin America (8%).
During a breakout session on Thursday focusing upon investment in Latin America, speakers agreed that European investors often overlooked Latin America for other parts of the Global South.
“Because we are not the poorest region in the world, funds have not flowed as generously as they have to the other parts of the South,” said Roberto Navas of Colombia’s Fundacion Arturo Sesana.
The European Impact Investing Consortium brings together Impact Europe with the country representative bodies GSG France, Impact Finance Belgium, the UK’s Impact Investing Institute, Netherlands Advisory Board on Impact Investing, Social Impact Agenda per l’Italia, SpainNAB, Portugal’s MAZE and the Hellenic Impact Investing Network. The Turkish impact investing advisory board (EYDK), Esade Center for Social Impact, the Politecnico de Milano’s department for management, economics and industrial engineering, GSG Impact and Invest for Impact Denmark also supported the work.
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