The latest buzz from the Global Impact Investing Network (GIIN) survey is all about the evolution of impact investing, peppered with some introspection on AI. New Yorkers know, if you’re not pivoting, you’re standing still.
A staggering 92% of assets are in the hands of bigger fish — those big-money players each throwing more than $500 million at impact investing strategies. “They’re the movers and shakers driving this growth,” says Dean Hand, the sharp mind heading up GIIN’s research efforts. These heavy hitters aren’t just tossing money around blindly; they’re strategically diving into mature, growth-stage companies. That’s a blueprint smash from the institutional investors’ playbook. Over the past year, impact assets have ticked up a compound annual growth rate of 14%. That’s no pocket change, folks.
bigger investors
| Asset Class | Growth Rate |
|——————-|————-|
| Public Debt | 32% |
| Real Assets | 27% |
| Public Equity | 19% |
But with rising interest rates, pesky inflation, and the good ol’ climate mess stirring the pot, 2023 proved to be challenging. Investors are fishing for strategies that cut through this mess. Interestingly, 74% still target those enviable market-rate returns.
Meanwhile, the AI bandwagon is gathering dust in impact investing circles. A good 38% of investors have refrained, stating a need for more tech knowledge first. Another solid third is waiting for success stories before jumping on board. Yet change is in the air — a quarter of these hesitant investors hint at incorporating AI into strategies next year. The potential for AI is undeniable, especially in measurement, where it could streamline impact performance data gathering processes. “AI can be a game-changer, especially in impact measurement,” Hand observes.
AI: hesitation for now
It’s a tale of cautious optimism in the realm of climate action. While there’s been significant past investment in the sector, the last five years have shown a surprising downturn. Yet, with climate issues shattering our oblivion, 52% of investors have dipped their toes in climate investments, lately, signaling a foundational shift. “Seeing figures that contradict themselves leaves you scratching your head,” Hand comments. It’s the palpable frustration and curiosity of finding out what gives. Smart money says that as climate woes become unmistakable, savvy investors will recalibrate their approaches.
investors’ climate perplexity
However, investors are jazzed that client demands have been a bright spot. They did complain, however, about the foggy regulatory guidance and murky exit strategies. Yet, in all the hustle and bustle of Wall Street scenarios, satisfaction is surprisingly high. A solid 90% of investors are happy with impact performance aligning, or even outmatching, their expectations.
New Yorkers, as always, want the dish on everything. So, the big picture in impact investing? It tells a story of hesitant adaptation to AI, growing, and maturing investment strategies, and unpredictable climate action. The saga unfolds.
