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Report

Creating impact, the promise of impact investing

The report takes stock of the market for impact investing and examines the conditions that would allow the market to grow and realize its potential. Over the last decade, impact investing has gained prominence as an approach to investment that aims to achieve both financial returns and social or environmental goals. This has created a dynamic but somewhat disorganized market of diverse participants, standards, and concepts. Although still small, the market is attracting considerable interest, and it has the potential to increase in scale, and thereby contribute to the achievement of the Sustainable Development Goals (SDGs) and the Paris climate goals.

Key points

This report focuses on impact investing, defined in the report as encompassing three observable attributes:

  • Intent. The investor articulates an intent to achieve a social or environmental goal by identifying outcomes that will be pursued through the investment, and specifying who will benefit from these outcomes.
  • Contribution. The investor follows a credible narrative, or thesis, which describes how the investment contributes to achievement of the intended goal—that is, how the actions of the impact investor will help achieve the goal. In this case, contribution is considered at the level of the impact investor, and can take financial or nonfinancial forms.
  • Measurement. The investor has a system of measurement in place linking intent and contribution to the improvement in social and environmental outcomes delivered by the enterprise into which the investment has been made. The measurement system enables the investor to assess.