NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, May 30, 2019

By Floyd DCosta

Impact investing, the channeling of investments towards socio-environmental initiatives, has seen considerable growth over the last few years. The asset class has been on the rise globally and offers a legitimate and pragmatic way to address pressing social and environmental causes. According to the Global Impact Investing Network, there are over 1,340 organizations worldwide that manage more than $500 billion in related assets in the present day.

However, even though it holds much promise as a means to solve real world problems and improve the quality of life in underdeveloped regions, there are fundamental challenges holding back this asset class from gaining mainstream adoption. Key barriers to adoption are keeping legitimate financial and regulatory institutions from recognizing the true potential of impact investing.

Photo courtesy of Christian Ditaputratama.