From the Margins to the Mainstream
Assessment of the impact investment sector
While much excitement has been generated around impact investing lately, the sector continues to face numerous challenges as it moves more towards being acknowledged as a distinct asset class.
Over the last few years, much excitement has been generated around the term “impact investing” – an investment approach that intentionally seeks to create both financial return and measurable positive social or environmental impact. Despite the buzz, there is limited consensus among mainstream investors and specialized niche players on what impact investing is, what asset classes are most relevant, how the ecosystem is structured and what constraints the sector faces. As a result, there is widespread confusion regarding what impact investing promises and ultimately delivers.
This report from the World Economic Forum Investors Industries, prepared in collaboration with Deloitte, is a result of engaging over 150 mainstream investors, business executives, philanthropic leaders and policy-makers through interviews, workshops and conference calls. The overall objective of the Mainstreaming Impact Investing initiative is to provide an initial assessment of the sector and identify the factors constraining the acceleration of capital into the field of impact investing.
The report is divided into five sections:
- An outline of the motivation, focus and scope of the initiative
- The definition of impact investing and how it differs from traditional investing
- A snapshot of the state of the sector
- The constraints that asset owners face when considering allocation of capital to impact investing
- Key recommendations various participants should take to advance impact investing out of the margins and into the mainstream.