Impact investing represents a potential additional funding stream for development, but the field is still evolving and those working in it warn investors may be expecting too much, too soon. While the field may be beyond its initial phase, stakeholders focused on building the infrastructure and proving its case agree that there is still much work to be done. Impact investments are made with the intention of generating measurable social and environmental impact, along with a financial return.
It’s clear that the sum invested in this way is growing — a recent study showed that last year about $10.6 billion in impact investments were made and investors intend to commit this year a further $12.7 billion or 19 percent more, with about 70 percent of the total money is invested in emerging markets. Though there is more clarity now about what impact investing is, one of the greatest challenges remains how to define and talk about those investments. And, those definitions would help to tackle what is one of the most often discussed challenges that is impeding growth in impact investing — accurately measuring and tracking outcomes. This article explores both, and what is being done to mitigate them.
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