Over 70% of investors access impact investing via private equity, followed by venture capital (44%), private credit (36%) and infrastructure (31%), according to specialist global impact investment firm Blue Earth Capital’s Impact 360 Survey.
The inaugural survey, which drew on 130 fund managers (39%), advisors (32%), LPs/asset owners (16%) and impact companies (13%), follows the publication of the firm’s 2023 impact report.
A majority (83%) believe that the financial returns of impact investing have so far met or exceeded their expectations. This is reflected in 79% believing that impact elements will have a positive effect on business valuations over the next five years, compared to those that do not incorporate impact.
For impact investors, the biggest areas of focus are climate action (29%) and sustainable agriculture (14%), with infrastructure, financial inclusion and healthcare tied at 10%. Meanwhile, 53% noted that the finance community’s understanding of the overall impact space was “average”, while 32% described it as “poor”.
Regionally, over two-thirds believe Africa (62%) and Asia (61%) offered the best opportunities for impact investing, followed by Europe (52%), Latin America (47%) and North America (39%). However, when it comes to accessing said opportunities, 69% do so through managers in Europe, while 47% opt for those in North America.
Investors were split on the matter of regulation, with 46% believing that the levels are “about right” and 40% believing that more is needed to combat “impact-washing”, the latter of whom 61% were LPs. The remaining 14% agree that regulation is not fit for purpose but instead believe less is needed to reduce the burden on the financial sector.
