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November 12, 2024

Key Takeaways from GIIN Impact Forum 2024

By Rosalie Vendette

On October 23 – 24, over 1,600 delegates from 80 countries gathered in Amsterdam for the annual GIIN Impact Forum 2024, hosted by the Global Impact Investing Network (GIIN). The forum showcased the increasing momentum behind impact investing, driven by new research and support from major pension funds. The program facilitated discussions on how impact practices and tools can address global challenges and drive solutions.

Here are key takeaways from one of the largest impact investing conferences:

  1. Impact investing continues to grow

At the forum’s outset, the GIIN shared that global assets in impact investing have reached CAD 1.571 tn, a 21% compound annual growth rate over the past five years.

Notably, pension plans and asset managers represent the two largest sources of impact capital, making up 56% of total assets. When asked about the scale of the impact investing market, GIIN CEO Amit Bouri responded, “The scale of our problems defines the scale of our ambitions,” emphasizing the importance of tackling climate change, biodiversity loss and social inequalities.

For more information, visit: Sizing the Impact Investing Market 2024.

  1. More investors are applying an impact lens

The conference explored the concept of applying an “impact lens” across an entire portfolio both during a pre-conference training and a panel featuring many institutional investors, including MassMutual (USD 263 bn) and Zurich Insurance (USD 171 bn). Applying an impact lens involves setting an overall investment thesis across a portfolio, rather than segmenting asset classes or funds. In this approach, impact starts at the top with clarity on the type of problems an investor wants to help solve. Investors then determine clear objectives through a Theory of Change that informs impact measurement and management practices before embedding impact throughout the investment cycle.

To learn more, consult GIIN’s Holistic Portfolio Construction with an Impact Lens report, released last December.

  1. Pension plans show strong commitment

This year’s forum highlighted the growing role of pension funds, with many industry leaders sharing how they embed impact into their portfolios to benefit their members. ABP and PGGM unveiled new commitments to impact investing.

  • PGGM (EUR 256 bn) recently introduced what it calls “3D investing”, a strategy that balances return, impact and risk. This commitment reflects an evolving fiduciary role, prompted by participants increasingly urging pension funds to consider the broader impact of their investments on the world. PGGM is also aiming for 20% alignment to United Nations Sustainable Development Goals (SDGs) by 2025, intending to double real-world contributions to the SDGs. PGGM has set impact outcome targets for 2030 for energy transition and health, with plans to add biodiversity soon.
  • Earlier this year, ABP (EUR 502 bn) announced an ambitious EUR 30 bn commitment to intentional and measurable real-world impact by 2030, equivalent to 6% of the fund. This includes EUR 3 bn dedicated to climate and EUR 1 bn to biodiversity solutions.

For more details about how institutional asset owners are adopting impact strategies, we recommend this read: Pursuing Impact Within a Portfolio: Insights From Institutional Asset Owners.

  1. Misconceptions about returns persist

As the GIIN celebrates its 15 anniversary, impact investing is steadily transitioning from an emerging practice to an established consideration by a growing number of institutional investors.

Despite that, challenges remain—chief among them, the persistent misconception that impact investing yields lower financial returns or concedes financial returns for positive environmental or social outcomes. According to the GIIN, 74% of investors target market-rate returns and the majority report satisfaction with financial performance. However, others who have not directly engaged in impact investing and may still believe it requires concessions on financial returns.

According to George Graham from the South Yorkshire Pension Authority (UK), impact is a value-creation generator. “Finding return is becoming harder and harder if you look in traditional places. If you look in new places, you will find it,” he shared.

We anticipate several academic papers on the relationship between risk, return and liquidity will be published soon which may dispel the myth.

Quinn+Partners advises leading assets managers and owners on their impact investing efforts by assessing this fast-evolving landscape, establishing actionable strategies and building impact measurement and management (IM&M) programs. If you are interested in learning more or developing your impact investing approach, please get in touch.