The UN PRI has published a new 112-page report designed to offer guidance and best practice on what constitutes and impact investment.
The organisation’s research team concluded that investment firms have failed to agree uniform definitions, market concepts and a common language to support the growth of impact investing, with less than 500 organisations, globally, making an impact investment in 2016.
The PRI Impact Investing Market Map was developed by a group of researchers, fund managers and academics, with research from more than 450 studies and reports from UN agencies, thinktanks and commercial organisations included.
Kris Douma, director of Investment Practices and Engagements at the PRI, said the report contains information about 10 environmental and social thematic areas of impact investments and businesses that, by their nature, intend to contribute to sustainability and the Sustainable Development Goals (SDGs).
He explained: “The resource provides a clear direction for investors to direct their capital where it can help companies that are providing solutions to the challenges articulated in the SDGs, while giving them the comfort of investing in traditional asset classes and at a scale that is appropriate.”
In July, several fund managers told ESG Clarity, that they had concerns about the future of Impact Investing as a recognised niche sector, due to the greenwashing that was now becoming prevalent in the market.
At the time, Patrick Scheurle, chief executive officer at Blue Orchard Impact Investment Managers warned it threatened the credibility of such investments.
“It is a large risk to the sector,” he said. “There is more and more greenwashing, where a lot of players claim to be impact investing, but we would not consider them to be doing so.
The UN PRI recognised the presence of numerous loose interpretations of impact investing in its Market Map, but noted that investors still committed some $1.3 trillion to “mainstream impact investments” in 2016, despite the muddled definitions.
In introducing the latest report, PRI director Kris Douma said the organisation expects that the Market Map would improve the clarity and scalability of the impact investing industry and improve the consideration of the sustainable development goals across regions and countries.