Who are social impact investors?
What is Social Impact Investing and Who Are the Major Players?
Social impact investing (SII)—also known as impact investing—is a growing investment strategy that aims to generate both financial returns and measurable social or environmental benefits. It’s about putting money to work to create positive change, such as funding renewable energy projects, affordable housing, or community development initiatives.
The Growing Market for Social Impact Investing
The global market for SII is expanding rapidly. In 2018, impact investments totaled $502 billion, up from $228 billion in 2014, according to the Global Impact Investing Network (GIIN). By 2025, the market is expected to reach an impressive $2.5 trillion.
Despite this growth, social impact investing remains relatively new and niche. So, who exactly are the investors driving this movement?
Who Are Social Impact Investors?
Social impact investors come from various sectors, each bringing unique perspectives and goals to the table. Here are the major players:
1. High-Net-Worth Individuals (HNWIs)
Individuals with investable assets of $1 million or more (excluding their primary residence) play a significant role in impact investing. In 2018, HNWIs made up 37% of all impact investors globally, according to GIIN. These investors often prioritize initiatives aligned with their personal values or philanthropic goals.
2. Foundations
Foundations are another major group of impact investors, comprising 23% of the global SII market in 2018. These organizations typically focus on funding projects that align with their mission, such as poverty alleviation, education, or healthcare initiatives.
3. Development Finance Institutions (DFIs)
DFIs, such as the World Bank and the African Development Bank, invest in projects that promote economic development and poverty reduction. In 2018, DFIs accounted for 15% of all social impact investors globally.
4. Asset Managers
Asset managers represent 9% of the SII market. These firms manage investments on behalf of clients and often incorporate social or environmental criteria into their portfolios. By aligning their strategies with ESG principles, they cater to investors seeking both financial returns and measurable impact.
Why Social Impact Investing Matters
Social impact investing is not just about earning financial returns; it’s about driving meaningful change. Companies and organizations involved in SII contribute to solutions for global challenges such as climate change, poverty, and inequality.
For professionals in corporate roles such as CSR Managers, HR Managers, CEOs, CFOs, and ESG Managers, understanding the landscape of impact investing can open up new opportunities to align business objectives with social responsibility.
The Future of Social Impact Investing
As the market grows, SII is becoming a crucial part of the investment landscape. Companies and investors alike are recognizing the importance of aligning financial goals with positive societal impact.
If you’re looking to explore how social impact investing can benefit your organization, Helpwan is here to help. We believe in making measurable social impact more accessible and achievable.
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