The world is on the brink of a revolution in how we solve society’s toughest problems. The force capable of driving this revolution is ‘social impact investing’, which harnesses entrepreneurship, innovation and capital to power social improvement. It is already bringing significant advances in areas such as reducing prisoner reoffending, caring for children and the elderly, community regeneration, financial inclusion, and supported housing. It has the potential to generate great benefits in developed as well as developing countries. Social impact investing, impact investing for short throughout this report, encompasses environmental impact. It is at the core of a broad ‘impact continuum’, that runs from philanthropy to responsible and sustainable investment, which includes all those seeking to achieve positive impact.
Impact investment is growing fast. The amount invested by the 125 leading impact investors is forecast to grow by nearly 20% this year, according to the latest study by the Global Impact Investment Network (GIIN) and JP Morgan.1 Given that $45 trillion are in mainstream investment funds that have publicly committed to incorporate environmental, social and governance factors into their investment decisions,2 it would only need a small fraction of this money to start moving into impact investment for it to expand rapidly along the growth path to the mainstream previously taken by venture capital and private equity.