The global impact investing market size was estimated at USD 66.75 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 18.8% from 2023 to 2030. The impact investing Asset Under Management (AUM) was valued at USD 3.3 trillion in 2022. The market growth is driven by numerous key factors shaping the landscape of sustainable and socially responsible investments. One of the main drivers is the increasing demand from investors to align their investments with their values and positively impact society and the environment. Investors are becoming more aware of our social and environmental challenges and are seeking investment opportunities that address these issues while generating financial returns.
Another driver for the growth of the impact investing market is the growing recognition of the potential for financial returns from investments that create positive social and environmental outcomes. Impact investments are no longer seen as a trade-off between financial returns and impact but rather as an opportunity to achieve both. More evidence emerges of successful impact investment strategies and the financial performance of impact funds. As a result, investors are becoming more confident in allocating their capital to these opportunities.
Regulatory changes and policy support are also driving the growth of the impact investing market. Governments around the world are implementing policies and regulations that encourage and support sustainable investments. This includes initiatives such as tax incentives, grants, and subsidies for impact investments, as well as the integration of Environmental, Social, and Governance (ESG) considerations into regulatory frameworks. These measures provide a favorable environment for impact investing to thrive and attract a broader range of investors.
Asset Class Insights
The equity segment dominated the market in 2022 and accounted for a revenue share of more than 48.0%. Equity investments provide investors with an ownership stake in companies actively addressing social and environmental challenges. This allows investors to directly contribute to positive change by supporting businesses that align with their values and impact goals. Moreover, equity investments offer the potential for significant financial returns, which can be attractive to investors seeking both impact and financial gains.
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Offerings Insights
The equity segment dominated the market in 2022 and accounted for a revenue share of more than 32.0%. The equity market provides many opportunities, from established impact-focused funds to early-stage venture capital investments in innovative and impactful startups. This diversity allows investors to align their capital with companies that closely align with their values and impact objectives. Moreover, the equity segment offers liquidity, allowing investors to buy and sell shares relatively easily, enhancing flexibility and portfolio management.
Investment Style Insights
The active segment dominated the market in 2022 and accounted for a revenue share of over 63.0%. Active investing allows impact investors to have direct engagement and influence on the companies or projects they support. This hands-on approach aligns with the goals of impact investors who seek to drive positive change and make a tangible impact on social and environmental issues. Active managers actively select investments based on specific impact criteria, conducted via due diligence, and actively monitor and engage with portfolio companies to ensure they uphold their impact objectives.
Investor Type Insights
The institutional investors segment dominated the market in 2022 and accounted for a global revenue share of over 65.0%. The segment has experienced significant growth due to the increasing interest from institutional investors, such as pension funds and endowments. These investors recognize the importance of incorporating social and environmental factors into their investment decisions. They view impact investments as an opportunity to generate both financial returns and positive societal and environmental outcomes. As a result, there has been a surge in allocations towards impact investments as institutional investors seek to contribute to sustainable development.
Regional Insights
North America dominated the impact investing market in 2022 and accounted for a revenue share of more than 35.0%. This is primarily due to the rising interest among investors in aligning their investments with social and environmental values. The region boasts a mature impact investing ecosystem characterized by a robust network of impact investors, intermediaries, and impact-driven enterprises. This ecosystem facilitates the flow of capital toward impactful projects and enterprises, driving the market's growth. In addition, North America's strong regulatory framework and supportive policies also create a favorable environment for impact investing activities.
Some prominent players in the global impact investing market include:
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