Impact investing continues to grow despite near-term headwinds, according to a report released Friday by the International Finance Corp., a member of the World Bank Group.
Impact investing in private markets could be as much as $2.1 trillion in assets under management, although only $505 billion is clearly measured for development impact and financial returns, said the report, Growing Impact: New Insights into the Practice of Impact Investing.
In public equity markets, the report suggests that $10 trillion in assets actively managed could be directed toward achieving impact. The report includes impact investing trends, a survey of investor practices, and 32 case stories from signatories to the Operating Principles for Impact Management on how they are implementing them.
So far, 97 asset owners and managers with an estimated $300 billion in impact assets have signed the operating principles that were developed in 2019 by IFC and leading impact asset managers and asset owners. Early adopters included AXA Investment Managers, BNP Paribas Asset Management, Calvert Impact Capital, Credit Suisse, KKR & Co., Nuveen and Prudential Financial Inc.
The principles require investors to measure, monitor, verify and disclose their impact, with the goal of creating market standards for signatory organizations.
"With the global economy now enmeshed in a deep recession, the impact investment field is facing a crucial stress test as companies scale up their response to COVID-19 and look towards shaping a greener, more resilient and inclusive recovery," said IFC CEO Philippe Le Houerou in the report's foreword. "At the time of writing, emerging economies were facing a dramatic drop in international and domestic private investment. In spite of that, initial indicators from this report show the impact investing market has been growing and maturing."