Impact investing could answer many of government's questions

IMPACT investing is moving from the margins into mainstream debate.

- MANDY JAYAKODY

IMPACT investment is a practical approach to financing solutions capable of driving progress across diverse themes from gender equity and the just transition to climate action, while delivering financial returns, says the writer. | File

(File)

The global market size for impact investment between 2012 and 2022 is estimated to have increased from $500 billion to $1.2 trillion, an indication that impact is emerging as a new benchmark of investment value.

It is no longer just the work of philanthropies or a handful of forward-looking investors; impact investment is a practical approach to financing solutions capable of driving progress across diverse themes from gender equity and the just transition to climate action, while delivering financial returns.

Although impact investing practice has been around for decades, scaling an ecosystem to maturity presents both opportunities and difficulties.

Among these challenges are building investor confidence, incentivising participation from a diverse set of investors, and building a robust pipeline of investable projects.

Equally important is directing impact investment toward activities that grow the economy, like building infrastructure, so that capital not only delivers social and environmental returns but also strengthens the foundations of sustainable economic growth.

The next generation of investors want more than financial returns and are looking to expand the value that their capital can unlock for society and the environment.