Tremendous growth driven largely by investor demand for impact across asset classes, including public markets
TORONTO – February 21, 2019 – The 2018 Canadian Impact Investment Trends Report shows that impact investing is growing rapidly in Canada, up from $8.15 billion at the end of 2015 to $14.75 billion at the end of 2017 – reflecting a growth rate of 81% over two years.
The report, released today by the Responsible Investment Association (RIA) in collaboration with Rally Assets, tracks the growth and development of impact investing in Canada. Impact investing refers to “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.” The report is based on survey data collected from asset managers and asset owners, as well as publicly-available sources.
This significant growth is attributable to rising demand for impact across asset classes, including public markets. Public equities now represent 41% of impact assets under management, which reflects the growing desire of investors to seek impact across their entire portfolio. The report also revealed that, while impact investors target various rates of return, impact investors overwhelmingly reported that performance has met or exceeded their expectations.
“Consumers and investors are increasingly aware and concerned about societal challenges, and these concerns have paved the way for impact investing,” said Dustyn Lanz, CEO of the RIA. “There is still a long road ahead for addressing poverty, climate change and other great societal challenges. But the growth of impact investing brings cause for optimism, because many of the solutions will start with a single investment.”
Survey respondents are bullish on the future growth of impact investing in Canada, with 89% of respondents expecting moderate to high levels of growth over the next two years.
“Why is impact investment growing? Because it’s working. Investors who are aligning their assets with their values report that they are meeting or exceeding their financial targets while creating measurable impact,” said Andrea Nemtin, Partner at Rally Assets. “It’s becoming easier to mobilize capital towards issues that matter to investors and our shared future.”
- Impact assets under management (AUM) in Canada now total $14.75 billion, up from $8.15 billion reported two years prior. This represents 81% growth over a two-year period, which is nearly double the growth rate of all responsible investment (RI) AUM, which grew by 41.6% over the same period.
- Impact investments in Canada have expanded significantly into public markets, particularly into public equities that now represent 41% of impact AUM reported. Correspondingly, impact investment funds and managers now account for over half of impact AUM.
- While impact investors target various rates of return for their investments, investors overwhelmingly reported that performance has met or exceeded their expectations.
- According to survey respondents, the considerable growth of impact investing in Canada is likely to continue. 89% of respondents expect moderate to high levels of growth in impact investing over the next two years.
View the full report here: https://www.riacanada.ca/research/2018-impact-trends-report/
About the Canadian Impact Investment Trends Report
The Responsible Investment Association (RIA) publishes the Canadian Impact Investment Trends Report on a biennial basis to understand and assess the characteristics of impact investing in Canada. Researchers collected survey data from investment managers, asset owners and impact organizations. This data was supplemented by publicly-available sources such as annual reports.
About the Responsible Investment Association
The Responsible Investment Association (RIA) is Canada’s industry association dedicated to responsible investment (RI). Members include mutual fund companies, financial institutions, asset management firms, advisors, consultants, investment research firms, asset owners, individual investors and others interested in RI. Our members believe that the incorporation of environmental, social and governance (ESG) factors into the selection and management of investments can provide superior risk adjusted returns and positive societal impact.
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