January 7, 2013 - J.P. Morgan and the Global Impact Investing Network (GIIN) released today Perspectives on Progress, a report that reveals the experiences, expectations, and perceptions of 99 impact investors in 2012, as well as their plans for 2013. The survey indicates a growing market, with respondents planning to commit USD 9 billion to impact investing in 2013, up from a total commitment of USD 8 billion in 2012.
Additionally, the vast majority of surveyed investors report that their impact investment portfolio performance is meeting or exceeding social, environmental, and financial expectations, which is critical to impact investments as impact investors seek measurable social and environmental impact alongside financial returns. Two-thirds of respondents are principally pursuing market-rate financial returns. Investors surveyed for the report include fund managers, development finance institutions, foundations, diversified financial institutions, and other investors with at least USD 10 million committed to impact investment.
"At J.P. Morgan Social Finance, we are especially encouraged by the findings in this survey - that, despite the market's early stage, investors' portfolios are meeting financial expectations in addition to social and environmental expectations," said Yasemin Saltuk, Director of Research for J.P. Morgan Social Finance and co-author of the report. "The findings from this report are insightful and we are optimistic for the continued growth in investments that have a positive social and environmental impact."
"Although investors have been making socially and environmentally motivated investments for quite some time, collaboration to develop a coherent and supportive market has increased significantly in the last five years," said Amit Bouri, Managing Director at the GIIN and co-author of the report. "In the results of this survey, we see positive indication of a market growing in both size and sophistication, which we hope will encourage more activity and attract new investors to the impact investing field."
Though the impact investing market is relatively new, a majority of respondents report that some or many investments passed their initial screens in nearly all regions of the world, with U.S. & Canada, South Asia, and Latin America & the Caribbean providing the most robust pipelines to surveyed investors. However, respondents believe the market is still challenged by a lack of appropriate capital across the risk/return spectrum and a shortage of high-quality investment opportunities. Encouragingly, surveyed investors indicate that progress was made in these areas and across other indicators of market growth in 2012.
Respondents also highlight the importance of impact measurement for both raising capital and general industry development. Notably, 96 percent of respondents measure their social and/or environmental impact, with most utilizing third-party standards, including the Impact Reporting and Investment Standards (IRIS) metrics, offered as a free public good by the GIIN.
Perspectives on Progress is the third in a series of reports, started in 2010, that present perceptions of the impact investment market as well as portfolio performance from a sample of impact investors. Impact investments are investments that are made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. They can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances.
About J.P. Morgan's Corporate & Investment Bank: J.P. Morgan's Corporate & Investment Bank is a global leader across banking, markets and investor services. The world's most important corporations, governments and institutions entrust us with their business in more than 100 countries. With $18 trillion of assets under custody and $393 billion in deposits, the Corporate & Investment Bank provides strategic advice, raises capital, manages risk and extends liquidity in markets around the world. Further information about J.P. Morgan is available at www.jpmorgan.com.
About the Global Impact Investing Network: The Global Impact Investing Network (GIIN) is a not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. For more information, please visit www.thegiin.org.