London, UK – The Impact Investing Institute today released its second report on the size of UK impact investing market, revealing substantial growth and increasing sophistication in investments that aim to generate positive social and environmental outcomes alongside financial returns.
Impact investments are commercial investments that target positive social and environmental outcomes. They include investments in healthcare, renewable energy, affordable housing and much more.
Key findings from the report include:
- The UK impact investing market has grown to £76.8 billion in assets under management (AUM) as of end-2023.
- This marks a £19.3 billion increase from the Institute’s inaugural report and represents a 10.1% compound annual growth rate from the beginning of 2021 until the end of 2023.
- Impact investing growth has significantly outpaced the broader UK asset management sector, which had an annual growth rate between -2% and 0% over the same period.
- The UK impact investing market accounts for between 8% and 9% of the global impact investing market.
The report, produced through an extensive market survey and engagement with over 100 key market actors, thought leaders, and policymakers, highlights that this growth occurred despite challenging market conditions. This resilience indicates the increasing importance and maturity of impact investing in the UK financial landscape.
Kieron Boyle, CEO of the Impact Investing Institute, commented, “The UK faces many challenges. The continued growth of impact investing in the UK demonstrates the potential to transform capital markets to support a fairer, greener, more resilient future. It invites all stakeholders – investors, businesses, policymakers, and citizens – to participate in building a future where financial success and positive impact are inextricably linked.”
Stephanie Peacock, Minister for Sport, Media, Civil Society and Youth, commented:“Impact investing plays a pivotal role in helping to address some of the country’s most pressing societal and environmental challenges. It is no surprise that it was a Labour Government that saw and unlocked this potential. From supporting affordable housing or ensuring positive outcomes for young people to helping the country’s transition to net zero, this report is a testament to the successful collaboration of government, investors and civil society. The UK’s impact investing market has experienced substantial growth of late, now accounting for a significant share of the global market. I look forward to continuing to work with the sector and develop further partnerships.“
Lisa Nandy, Secretary of State for Culture, Media and Sport in introducing the report commented: “The only way we will achieve a decade of national renewal is by delivering for every corner of this country [the UK]. This means real economic growth back into our communities, new opportunities in industries like clean energy and jobs in sectors of the future. By combining our shared knowledge, resources and values, impact investments will help us make this a reality in the years to come. I want to thank the Impact Investing Institute for leading the charge.”
The report also notes significant trends in the market:
- Private equity attracts the highest proportion of impact capital at 45%, followed by real assets at 28% and private debt at 11%.
- There is increasing demand for impact investing among institutional investors, with the UK’s Local Government Pension Scheme (LGPS) making more local impact allocations.
- 67% of survey respondents expressed optimism about increasing or sustaining their allocation of capital towards impactful companies, projects, and assets in the UK.
The Impact Investing Institute calls on asset owners, asset managers, investment advisors, and the UK government to seize the opportunities presented by this growing market. The Institute emphasises the crucial role of collaboration between private capital and government in mobilising resources at scale to address pressing social, environmental, and economic challenges and transforms lives across the UK and beyond.
The research was supported by the Department for Culture, Media and Sport.
For more information or to request a copy of the full report, please contact:
Stephanie Dawoud, Head of Communications and Engagement, Impact Investing Institute Email: comms(at)impactinvest.org.uk Phone: 077 49 74 17 93
About the Impact Investing Institute: The Impact Investing Institute is an independent, non-profit organisation working to transform capital markets so they support a fairer, greener, more resilient future. We see impact investing as an effective way to achieve that transformation and so we work to accelerate the field, both in the UK and globally. We come up with innovative solutions that help private finance address societal challenges, and we grow the field of impact investing by building expertise across financial markets. We work with investors and their advisors to move more effective capital for the benefit of people and the planet, and we advocate for regulatory and policy environments that allow the impact investing market to thrive.
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