Impact Investing Market Size, Share, Growth Analysis, By Asset Class, By Offerings, By Investment Style, By Investor Type, By Region - Industry Forecast 2024-2031

Drivers

• Emphasis on Environmental and Social Responsibility

Increasing awareness regarding climate change, poverty, unemployment, and inequality is pushing enterprises and investors to focus on other aspects other than financial returns. Impact investing helps investors diversify their portfolio by investing in social and environmental causes that create a positive image and boost revenue generation as well.

• Better Impact Measurement and Reporting Capabilities

Impact investing has also gained massive popularity as the ability to gauge the impact of investments has improved substantially in recent years. Standardized metrics and frameworks like the Global Reporting Initiative (GRI) and Sustainable Development Goals (SDGs) are providing accountability and transparency to help investors envision and witness the impact of their investments.

Restraints

• Impact Washing Risks

Impact washing refers to the idea of false claims of delivering funds for a social or environmental cause to project a positive image of an organization or investor. This has led to skepticism and resulted in issues in identifying genuine impact investments that actually make a difference. Hence, the risk of impact washing could slow down impact investing market growth in the future.

• Low Short-terms Returns

Impact investments are often designed to provide a better long-term return in monetary as well as societal impact terms. This results in lower short-term returns, which could discourage investors and push them towards traditional investments offering better short-term returns. This issue of low returns is estimated to slow down the demand for impact investing going forward.