Introduction to impact investing
Introduction
How to use these resources
Resources in this module
- What is impact investing
- Impact investment in context of the wider investment landscape
- The spectrum of capital
- The defining characteristics of impact investing
- History of impact investing
- Key global frameworks and standards – UN SDGs, the Impact Management Project and the IFC standards
- Challenges (definition, impact ‘washing’, measurement, myths) and opportunities (demand, data, policy support) and the evolving nature of the market
- Terminology
Glossary of terms
We have put together a glossary of terms for impact investing
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What is impact investing
There are no Intermediate resources for this topic
Impact investment in context of the wider investment landscape
There are no Intermediate resources for this topic
The spectrum of capital
There are no Intermediate resources for this topic
The defining characteristics of impact investing
There are no Intermediate resources for this topic
History of impact investing
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Roadmap for the Future of Impact Investing
Global Impact Investing Network
Reading time: 30 minutes
This is a very interesting summary impact investing industry and it explains how it has evolved since 2007 from uncoordinated innovation to building a marketplace. It also summarises the progress across three different platforms: intermediation, infrastructure and absorptive capacity.
What the reviewer found helpful:“The timelines on pages 33-35 provide a nice overview of the evolution of impact investing over the past 15 years, including key reports, policy changes and measurement landmarks.”
Eilidh Anderson
Intermediate
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The History of Impact Investing with Antony Bugg-Levine – Social Capital Markets
Social Capital Markets
Reading time: 50 min listen
Antony Bugg-Levine of the Nonprofit Finance Fund speaks in this interview about the history and evolution of impact investing, as well as how this can be relevant in today.
What the reviewer found helpful:“A great listen about the history and evolution of impact investing as well as how it relates to modern issues and the pandemic.”
Mhairi Littlewood
Intermediate
✔ Recommended
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The Risk of Impact: Five steps towards and inclusive and sustainable economy, Oct 2017
Impact Investing Institute
Reading time: 25 minutes
The UK National Advisory Board for Impact Investing presents their five-step impact investing and purposeful business strategy to tackle some of the UK’s most significant societal issues, alongside boosting These five recommendations are listed below: 1. Adopt an inclusive and sustainable UK investment agenda 2. Empower savers to invest in line with their values 3. Put purpose at the heart of public procurement 4. Accelerate the rise of purposeful business 5. Strengthen the UK’s role in international development finance
What the reviewer found helpful:“This gives a clear overview of the impact ecosystem within the UK and strategies to scale-up”
Serena Grover
Intermediate
✔ Recommended
Key global frameworks and standards – UN SDGs, the Impact Management Project and the IFC standards
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Investing for impact: Operating principles for impact management
International Finance Corporation
Reading time: 15 minutes
The report summarises the key building blocks for a robust impact management system and act as a reference point against which funds and institutions may be assessed. The 9 operating principles covering each of the 5 steps in the investment process: strategy, origination and structuring, portfolio management, exit, and independent verification of signatories.
What the reviewer found helpful:“The operating principles for impact management include a helpful description of mitigating and managing ESG risks”
Eilidh Anderson
Intermediate
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Investing with SDG outcomes: A five-part framework
United Nations Principles for Responsible Investment
Reading time: 40 minutes
The framework helps investors understand the real-world outcomes of their investments and how to shape those outcomes to help meet the UN Sustainable Investing Goals (SDGs) The report explains how the UN SDGs go beyond ESG mitigation and provides examples of how that can used by investors.
What the reviewer found helpful:“There is a short and inspiring video that accompanies this report which summarises the current market and the 5 part framework”
Eilidh Anderson
Intermediate
Challenges (definition, impact ‘washing’, measurement, myths) and opportunities (demand, data, policy support) and the evolving nature of the market
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Annual Impact Investor Survey 2020
Global Impact Investing Network
Reading time: 30 minutes
The GIIN’s 2020 Annual Impact Investor Survey details the investment activity of 294 leading impact investors, collectively managing USD 404 billion, over 2019 and forecasted into 2020. The survey has shown that impact investing has growth in depth and sophistication over 2010, with a rise in realised gross returns and assets over time and impact measurement and management practices.
What the reviewer found helpful:“The interactive charts were particularly useful for representing the impact investor survey data”
Serena Grover
Intermediate
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Growing a culture of social impact investing in the UK – executive summary
UK Government
Reading time: 20 minutes
This report gives a background on the UK social impact ecosystem, the current challenges and some recommendations for the future growth. The recommendations clearly explain what government, regulators, professional bodies and the financial services industry can do to better the industry, outcomes and make it easier for people to invest. The report gives 5 key action areas including improving deal flow and improving reporting. The report sets these out in the context of a ‘virtuous cycle’ whereby rising demand from investors and advisor engagement together with a supportive regulatory environment leads to more quality products. This enables social purpose organisations to attract investment which increases the number and scale of investment opportunities. From this, advancement in impact measurement and reporting will spur further demand.
What the reviewer found helpful:“This is a really concise summary of how all organisations can contribute in a practical and achievable way”
Eilidh Anderson
Intermediate
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From the Margins to the Mainstream (challenges: pp. 23-27)
World Economic Forum
Reading time: 10 minutes
Discusses the fact there are challenges faced by institutional investors that keep them from allocating capital towards impact investments. Most of these can be attributed to one of the four broad overarching challenges:: early-stage ecosystem, small average deal size, fit within asset allocation framework and double bottom line. When considering each of these, we must also consider the geography and that different types of institutional investors face different challenges.
What the reviewer found helpful:“A thorough summary of the challenges faced by institutional investors in impact investing, summarised clearly into four categories”.
Mhairi Littlewood
Intermediate
Terminology
There are no Intermediate resources for this topic