Impact Investing Market

Impact investing involves making investments with the intention of generating positive social and environmental outcomes alongside financial returns. And yes, it does differ from traditional investing because it goes beyond the financial profitability to address specific societal and environmental issues. Unlike traditional investing, impact investing places emphasis on some measurable positive impacts.

Poised to be expanding at a CAGR of more than 18% between 2023 and 2030, the market for impact investing has been projected to reach revenue worth around US$4.5 trillion by the end of forecast year.

Impact measurement involves the assessment of both the financial returns and the social or environmental outcomes of given investments. Various tools and metrics, such as the United Nations' Sustainable Development Goals (SDGs), are used to quantify and evaluate the broader impact of investments.

Impact investing typically spans various industry sectors, especially including renewable energy, affordable housing, education, healthcare, microfinance, and sustainable agriculture. Investors can choose sectors aligned with their values and address specific societal or environmental challenges.

Impact investments can generate competitive financial returns but may vary depending on the overall risk profile of a particular investment, and of course, the intended impact. Some impact investments might offer market-rate returns, while others could provide concessionary returns, prioritizing impact over financial gain.