John McLeod delves into the current global trends in impact investing and the opportunity for Australian philanthropists and charities to participate.
There are several factors currently combining globally to grow impact in a sustainable way. From the investor side, there is a growing volume and proportion of mainstream funds that are looking to invest for both socially positive (or at least not negative) and financially positive outcomes. They are joining an already active group of philanthropic capital holders who see the logic of using the 95% as well as the 5%.
At the same time, there are many people both within and outside of charities who are recognising that the sector’s current financial model isn’t sustainable and that projects which deliver social returns while also providing financial returns are a large part of the future. Connecting these two groups are an increasing number of governments and intermediaries trying to put in place the ecosystem that is needed to simplify and grow activity.
There is currently US$23 trillion in sustainable investments globally (stocks…