Editor’s Note: The following is an excerpt from The ImpactAssets Handbook for Investors: Generating Social and Environmental Value through Capital Investing; Edited by Jed Emerson (Anthem Press)
One of the first questions many ask about impact investing is just how big is the impact investing arena today? People want to know this to help them understand how many other investors are making use of this approach and, of course, the more people engaging in impact investing, the easier it is for you to buy and sell your investment positions, the more options for investment products you will have to help manage your risk and, overall, the easier it will be for you to find the types of opportunities that best reflect your interests and strategy.
You should not be surprised to learn that one’s definition of the size of the impact investing market depends on the type of investing you consider “impact,” the type of capital you are interested in deploying and the type of problem you’re wanting to go after. With all that in mind, here are a few figures that should get your attention.
The Report on U.S. Sustainable, Responsible and Impact Investing Trends 2016 stated:
• Overall, the field experienced 135 percent growth from 2012 to 2016.
• $8.10 trillion in U.S. domiciled assets at the outset of 2016 held by 477 institutional investors, 300 money managers and 1,043 community investing financial institutions to which various ESG criteria are applied in investment analysis and portfolio selection, and
• $2.56 trillion in U.S. domiciled assets at the start of 2016 held by 225 institutional investors or money managers that filed or co-filed shareholder resolutions on ESG issues from 2014 through 2016.
• These two segments of assets, after eliminating double counting for assets involved in both strategies and for assets managed by money managers on behalf of institutional investors, yield the overall total of $8.72 trillion, a 33 percent increase over the $6.57 trillion that the US SIF Foundation identified in sustainable investing strategies at the outset of 2014.
Or consider Dennis Price, writing for ImpactAlpha, who states that:
• “The latest tally of socially responsible investment shows growth in fixed-income and retail investing. The Global Sustainable Investment Alliance, which rolls up regional and national surveys from a half-dozen partners, casts a wide net, including negatively and positively screened public equities, green bonds and impact and community investments.