Over the last few years, tremendous progress has been made in the emerging impact investment sector. Whether it “teeters on the edge of explosive growth”107 will depend on whether institutional investors begin to allocate more capital to investments that deliver both financial return and social and/or environmental return.
As time progresses and the sector matures, many of the challenges identified in this report will become less constricting. Indeed, many of the challenges are attributed to the growing pains of a new sector. Impact enterprises and deal sizes will grow, track records will be built and perceptions about financial performance will be realized. Until then, a degree of commitment will be required by those investors intentionally looking to allocate capital towards impact investments. But no new market moves on commitment alone. Institutional investors that have found successful strategies delivering on the double bottom line will need to become advocates of the sector and share best practices and critical success factors.
The World Economic Forum will continue to advance this agenda. Over the course of the next year, it will engage leading mainstream investors in an effort to analyse the competitive advantage that results from an impact investment offering. In addition, the Forum will identify the best practices and organizational structures that asset managers, private wealth managers and financial services institutions can implement in order to make impact investing an integral part of their strategy and operations. Part of this assessment will include an analysis on the how to align multiple stakeholders in the formation of layered funds that address societal challenges. The intended goal of these efforts will be to continue to move impact investing from the margin and into the mainstream.