Impact Investing to Make a $9 Trillion Difference in 2014 - The Minute
Nine trillion dollars is a big number. That’s the amount forecast to be invested by the end of this year by the top 125 leading impact investors. Nine trillion dollars is 20 percent of $45 trillion, the total amount in mainstream investment funds that include ESG performance indicators in their investment decisions.
Those figures are from a recent study by the Global Impact Investing Network and JPMorgan Chase. Impact investing takes the passive screen frameworks of traditional socially responsible investment funds to the next level, in which both specific social objectives and financial returns are measured to create holistic valuations. Directing 20 percent of ESG-driven investment dollars specifically to impact investing puts this relatively new practice on a fast track trend in financial markets.
And asset managers of all kinds, from pension funds to equity investors, are looking for new products for these investments such as green bonds, instruments that enable capital raising and investment for projects with environmental benefits. This year’s green bond market will exceed $40 billion, increasing to a projected $100 billion next year, says the Climate Bonds Initiative. These numbers show that investors are finding substantial profits in purpose-driven business.
I’m John Howell for 3BL Media.