Growing appetite for impact investing to benefit EM countries

MANILA, Philippines — There is a growing appetite for impact investing worldwide that can potentially benefit emerging economies like the Philippines by way of investments that support the attainment of Sustainable Development Goals (SDGs), the International Finance Corp. (IFC) said.

The sister organization of the World Bank said as much as $269 trillion in financial assets held by institutions and households globally is potentially available for investment.

IFC said that if just 10 percent of this—$26.9 trillion— were channeled towards investments focused on environmental and social outcomes, it could speed up the attainment of Sustainable Development Goals (SDGs) and facilitate the shift to a low-carbon future.

Citing the results of a survey of asset managers, IFC chief executive officer Philippe Le Houerou, said 86 percent of respondents ventured into impact investing because of client demand.

“Investors are eager to show that they are broadly a force for good— that profit isn’t their only objective,” he said in the report titled “Creating Impact The Promise of Impact Investing.”

Demographic shift, he said, is driving some of the demand as younger investors increasingly favor “socially and environmentally motivated investment strategies.”

“And they’re willing to invest larger amounts in them,” he said.

Le Houerou said social and environmental causes most important to investors are those embedded in the SDGs like health, education, as well as water supply and sanitation.

“This is a historic opportunity that must not be squandered. As much as $269 trillion—the financial assets held by institutions and households across the world—is potentially available for investment,” he said.

 Le Houerou said around $26 trillion is currently invested in various financial instruments such as stocks, bonds, debt, and venture capital.

“Turning this appetite into actual investments will depend on the creation of investment opportunities and investment vehicles that enable investors to pursue impact and financial returns in ways that are sustainable,” he said.