The Global Impact Investing Network – GIIN’s latest market size report estimates that global assets under management in impact investing now represent $1.164 trillion, a sign of the sector’s “undeniable momentum.”
Global assets under management in Impact Investments now total $1.164 trillion (€1.2 trillion), according to estimates announced by the Global Investment Network (GIIN) at the GIIN Investor Forum in The Hague.
The Global Impact Investing Network
The figure is included in GIIN’s Sizing the Impact Investing Market report, which states that there are 3,349 impact investing organizations worldwide.
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According to GIIN, the data reflects an “increasingly broad” measurement of impact investing practices and continued growth in the market.
Speaking at the forum, Amit Buri, founder and CEO of GIIN, described the data as a sign of “undeniable momentum” in the impact investing industry, but acknowledged that more needs to be done.
“We now estimate that the global impact market has grown to more than a trillion dollars. This is an important milestone for the industry as it matures and grows in sophistication,” Bori said. “While growth in the $1.164 trillion market is a very positive sign for impact investing, it is also a call to action.”
The report, compiled with financial support from investment manager Nuveen, also highlights two key areas of development in the sector: green bonds and corporate impact investing practices.
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Regarding the latter, GIIN has just launched an initiative to promote business impact investing. Speaking to Impact Investor and other members of the press after the report’s launch, Bury said there has been an evolution in the way companies approach impact investing, from a conversation that only happens in the corporate fund or the CSR department, to the chief financial officer. Officer. . Shallow
Bury also reflected on some of the obstacles preventing the sector from growing further. Recent controversies and integrity concerns surrounding branded ESG strategies and anti-ESG political movements in the US could “create cynicism” and cause many to lose faith in the ability to use investments to “achieve real results for people”.
“There is a huge thirst for investment opportunities around the world that will help move the needle on addressing issues such as climate change, inequality and social inclusion and beyond,” he said. But ensuring integrity and clarity around sustainable and impact investing will be key to attracting more investors.
“I think the wider adoption of ESG is a good thing for the world, as long as expectations match what is actually delivered.”
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Impact investing is a new and growing field in which financial institutions and private individuals invest their money not only for financial return, but also for social and environmental impact.
The field is growing so fast that Anthony Bag-Levin and Jed Emerson, two major players in the field, recently described impact investing as a “dark tree” whose boundaries are shifting and definitions are in dispute.
I have worked in impact investing for most of the last half decade; So when my RGK Center colleague, Claire Zutz, asked me how she could learn more about impact investing in food and agriculture, my answer was to refer to people who know about the state of the sector, not the industry.
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Something clicked for both of us: the information is out there, but not easily accessible or visible, especially to newcomers and outsiders. What if we used graphics to help people see and access this area?
With the help of our friends at Enable Impact, Claire and I began our search by reading the Global Asset Managers List (GIIN).
GIIN is a nonprofit membership organization that uses robust metrics to support and grow the world of impact investing. We started by identifying asset managers who made investments in food and agriculture, and we could see the overlap in their investment portfolios.
Figure 1: GIIN members’ public investments related to food and agriculture. Yellow nodes are investors, blue nodes are companies and edges are investments.
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Despite the limitations created by the data at our disposal (more on that soon), we can already begin to develop some hypotheses.
For example, if you are a food entrepreneur trying to raise money from GIIN investors, then identifying companies that have raised money from several GIIN members, such as Kompanion Financial Group or Terrafertil (Figure 2), can be an effective way to gather information. Regarding the potential investor.
Figure 2: List of beneficiaries with more than two investments of GIIN members Kompanion Financial, Terrafertil and Cooperativa Agraria Noradino Ltda.
When we started this research, we thought that mapping would be useful as a fieldwork exercise, revealing the connections and paths that entrepreneurs can take in a network.
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As we progressed, we also discovered ways in which this research could benefit GIIN itself. The information may be used to recruit members, influence programming, and conduct research designed to return value to GIIN members.
For example, if you are responsible for managing the GIIN community, a graph visualization can represent membership opportunities. Charts can show which members of your network are active but not regularly investing with other GIIN members (see Phatisa and Investisseurs & Partenaires in Figure 1).
If not, you might want to know what other GIIN investments are. Combining this type of network analysis with traditional analysis of investment portfolios of GIIN members can reveal how GIIN can connect potential investors, thereby adding to the network it manages.
Maybe you are a co-op and want to know if GIIN members have invested in the co-op. Allows you to query the properties of nodes and edges. for example:
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From that initial seed pool of GIIN investors, we began to snowball: Did non-GIIN members invest with GIIN members? Through an aggressive press release comb, we gathered information from investors about their investments in GIIN companies.
Figure 4: Public information on investments made by GIIN members in food and agriculture companies and non-GIIN investors in these companies. Yellow nodes are secondary investors; Red nodes are GIIN members; Blue nodes are companies; The edges represent reversals.
We have two things. First, the graph shows the network of food and agriculture investors who are not part of GIIN but investors with several GIIN members, or rather GIIN members investing with several non-GIIN investors.
These relationships can reveal potential GIIN members and increase GIIN’s revenue. Using this, you can query to see what the conversions are for GIIN members and non-GIIN members.
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Figure 5: Public information on investments in food and agriculture companies by GIIN and non-GIIN investors. Yellow nodes are secondary investors; Red nodes are GIIN members; Blue nodes are companies; The edges represent reversals.
Second, the chart shows that some companies raised most of their money from non-GIIN investors. We’re curious about what others are doing, including entrepreneurs, investors and network managers.
We should add a few notes to these chart visualizations. For this round of research we only had access to publicly available information.
This was problematic in two ways: First, not all GIIN members publicly list their portfolios. Second, we had to search the Internet for information on co-investors, as public databases (Crunchbase, Angelist, Impact Alpha) did not have information on most of these investments.
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Furthermore, this chart represents only a few of the investments made by GIIN members. If we could map all GIIN investments, the map would look very different.
For us, these limitations only speak to the potential power of graph databases and network visualization to analyze impact investment networks for the benefit of entrepreneurs, investors and network managers. He facilitated these first steps.
Given more time and resources, we will take the opportunity to dig deeper into the data to give GIIN a more detailed overview, bring transparency to the opaque field of impact investing, and provide tools to make it easier for entrepreneurs to find resources. They need to grow their businesses and maximize the social impact they want to have.
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Mark Hand is Assistant Professor of Social Entrepreneurship in the RGK Center for Philanthropy and Community Service at the UT Austin LBJ School of Public Affairs. UnLtd is also a US venture partner, offering city-based grants to entrepreneurs solving critical social and environmental problems. … learn more. Impact investing is a growing global movement driven by more and more investors