Five key takeaways from Accelerating Impact

Key Lessons from Accelerating Impact

1. What is the size of the European direct impact investment market? What percentage of the total mainstream investment market does it represent?

The European mainstream investment market is estimated to be € 17.8 trillion, the sustainable/ESG investment reached € 3 trillion (17%) in 2021. We estimate the European direct impact investment market as €80 billion (0.5%), out of which – at least – € 32 billion (0.2%) has some elements of additionality (positive contributions that would not have happened if not for the investment intervention).


2. Is the impact investment market accelerating at the rate necessary to solve the key social and environmental challenges we currently face?

European impact investment assets under management grew by a substantial 26% from 2020 to 2021. However, we did not see the acceleration we had hoped for, making the goal to deliver on the SDGs by 2030 challenging.


3. What role do impact investors play in fair climate action finance?

The top three SDGs targeted - decent work and economic growth, reduced inequalities and climate action - include a mix of social and environmental goals, which shows how impact investors represent a force for change on both impact categories.


4. What are the biggest sources of funding for the European impact market and what untapped opportunities did the survey uncover?

Individual investors (26%) are the main source of capital together with financial institutions (28%) and institutional investors (23%). At the low end of the spectrum, foundations’ endowment assets and high net worth individuals represent an untapped potential of resources which could be mobilised to support impact funds. EU funding accounts for 5% of the funding available to impact investors. This is heading in a positive direction, growing from 1% in 2020.


5. Are impact investments enabling breakthrough solutions and fostering lasting positive change?

Impact investments including some level of additionality represent a surprisingly high percentage of the total European direct impact investment market – 48%. However, if we want impact investment to play a transformational role in contributing to a fair and green society, we should aspire for even higher percentage. 6. Measuring and managing impact – are impact investors walking the talk? All organisations surveyed report to measure impact using one of the accepted frameworks. However, only 83% also report going beyond measurement to manage it. This is promising but it highlights that, even in the impact sector, there is more way to go to ensure impact is embedded into daily decision-making processes.