Insights on European Impact Investing: (report attached)
European Impact Investing Consortium πβ¨: π₯π₯2024 European Impact Investing Market Sizing Report π₯π₯ ππ‘
Key points ππ:
π―π° Market Highlights
β‘οΈβ¨ β¬190 billion market size:
β‘οΈβ¨ The European private impact investing market has doubled in two years, now accounting for 2.5% of eligible assets under management (AUM). ππ
π―π Strong regional leaders:
β‘οΈβ¨ The UK, Netherlands, and France lead the market, benefiting from established ecosystems, while emerging players like Turkey, Portugal, and Greece show rapid growth potential. ππ
π―π° Global capital flows:
β‘οΈβ¨ 45% of European impact capital now flows outside the region, focusing on:
β¨ Africa (18%), β¨ Asia (12%), and β¨ Latin America (8%)-a 7% increase from the previous year. ππ
π―π± Focus on SDGs
β‘οΈβ¨ Top targeted Sustainable Development Goals (SDGs):
β¨ Decent Work & Economic Growth (62%)
β¨ Climate Action (46%)
β¨ Reduced Inequality (55%)
π―β οΈ Despite progress, only 17% of SDGs are on track-highlighting the urgent need for scalable solutions to global challenges. β οΈπ³
π―π Investor Impact
β‘οΈβ¨ Investor additionality: 62% of unlisted investments now show additionality (compared to 48% previously), driving projects in β¨ renewable energy, β¨ affordable housing, and β¨ healthcare that wouldn't have happened otherwise. π‘π
π―π° Key contributors: β¨ Institutional investors lead with 28% of capital, followed by β¨ banking institutions (22%). Growing engagement from β¨ foundations, β¨ corporations & β¨ high-net-worth individuals (HNWIs). πΌπ±
β‘οΈβ¨ Impact measurement and management (IMM) remains inconsistent
π― π Opportunities for growth:
β‘οΈβ¨ Social outcome contracts (SOCs) and blended finance models are still underutilized but offer immense potential to align stakeholders and scale solutions. πβ¨
π― π Climate leadership:
β‘οΈβ¨ Northern Europe focuses on environmental SDGs, while Southern Europe prioritizes social issues like inequality and housing, reflecting diverse regional needs. ππ³
π―π The report calls on investors, policymakers, and market leaders:
β‘οΈβ¨ Collaborate on harmonized standards for transparency and scalability
β‘οΈβ¨ Mobilize untapped capital from diverse investor groups
β‘οΈβ¨ Innovate financial tools, such as SOCs and outcome-based contracts
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Arun Kelshiker
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