Impact investing, where a measurable social and/or environmental impact is generated alongside a financial return, is developing rapidly across the investment community and all economic sectors, with strong UK and EU policy support.
This is among the key findings of the report The Future of Investment: Impact Investing, published today by the UK Sustainable Investment and Finance Association (UKSIF).
The report brings together insights from leading UK impact investment specialists drawn from UKSIF’s membership.
It shows that impact investing involves a range of different investment vehicles, from loans and equity to bonds, and highlights the opportunities and supporting regulatory regimes for impact investing in the UK.
The report also presents regulatory and other barriers to the sector, and lessons which the UK can take from abroad, along with expectations of significant sector growth over the next 5-10 years.
Simon Howard, UKSIF chief executive, said: “While impact investing may not be considered conventional investment practice today our panellists argue that it might be in ten years’ time.
"If they are right it may mean significant changes in some institutional portfolios and perhaps whole new types of retail investment emerging.
"The different motivations which drive this activity - from cost-cutting by Government, to belief driven by personal experience - and the expectations that market-level returns are possible from certain impact investments, justify the growing sophistication of opportunities which are already apparent.
"As the UK’s hub for sustainable and responsible investment, we are privileged to benefit from the insight of these leading-edge investment practitioners, and we hope that this report will be of value to wider institutional and private investors and their advisers.”