The challenges facing the world are significant and immediate. In 2015, the United Nations agreed on 17 Sustainable Development Goals (SDGs) and estimated that achieving the goals by 2030 would require between $5 trillion and $7 trillion annually. Impact investing can play an important in reaching the SDGs by channelling capital from a broad set of investors to address social and environmental issues, but it is also important to be aware of some of the barriers, real and perceived, that impact investing faces from regulation and the lack of common data and standards.

How to use these resources

Much of the content in this section relates to the United Nations SDGs. The SDGs are one framework that can be used by impact investors, but they are not the only one. It is also important at this stage to pause and reflect on the need for impact investing to work for people who ultimately benefit. They are covered in other modules as well, but this is the right moment to embed an understanding of their centrality to the impact investing process. Finally, make sure to read the three key reports that summarise the market’s growth drivers and constraints. Each takes a slightly different approach, but they have much in common.

Resources

Objectives and frameworks

Achieving the SDGs: the role of Impact Investing (opens new window)

Global Impact Investing Network

Reading time: 25 minutes

The report demonstrates how impact investors can have a role in advancing the UN’s Sustainable Development Goals (SDGs). The report provides 6 case studies of impact investors who have incorporated the SDGs into their investment strategies. It details which SDGs they align with; why they chose this approach; how they measure the impact against the SDGs; and what they believe are the implications of this approach on impact investing. The report also provides specific examples within each case study of impact investing projects carried out with the intention to align with the SDGs.

What the reviewer found helpful:  “This report used interesting case studies to bring to life the important intersection between impact investing and the SDGs”   Yinni Hu

introductory
Investing with SDG Outcomes (opens new window)

United Nations Principles for Responsible Investment

Reading time: 25 minutes

The report proposes a five-part framework from the PRI as to how investors can shape real-world outcomes in line with the SDGs The five parts of the framework include how investors can identify outcomes from their investments and operations and set policies and targets to shape outcomes in line with them. Parts 4 and 5 consider the role of the financial system as a whole and the need to work collaboratively with other actors to achieve the SDGs.  The report also highlights existing initiatives, tools and data that investors can use

What the reviewer found helpful: “The use of investor examples in the Appendix showcase the theory in practice” Chloe Mallo

intermediate

Target beneficiaries – how to identify them and how they can be impacted 

Focus on beneficiaries (opens new window)

Global Impact Investing Network

Reading time: 40 minutes

GIIN provides an overview of the performance of the various organizations contributing data to the GIIN IRIS1 initiative with a particular focus on the beneficiaries of impact investing. GIIN analyses the spread of beneficiaries across the following themes: beneficiary socioeconomic status, beneficiary demographic characteristics and beneficiary setting (rural and/or urban). GIIN also provides insights on the clients and suppliers spread across selected sectors e.g. financial services and agriculture.

What the reviewer found helpful: "The analysis of the scope of beneficiaries across the various themes." Kate Munuka

intermediate
The Good Analyst - Investing for Good (opens new window)

Investing for Good

Reading time: 20 minutes

What is the value to the beneficiaries (or end-users) of the impact you are generating? A practical document that suggests questions that we should ask when considering the beneficiary impact. Would be helpful for organising or sense-checking your own beneficiary impact metrics.

What the reviewer found helpful: “Who benefits and how much? The questions here are a practical starting point of things to consider.” Chris Cullen

intermediate

Key social and environmental challenges and how impact investing can channel capital to them address them  

Financing the SDGs: Impact Investing in Action (opens new window)

Global Impact Investing Network

Reading time: 20 minutes

The report looks at several case studies, showcasing the different ways impact investors are directing capital to the SDGs and how they are integrating the SDGs into their respective investment processes from idea generation and due diligence to investment selection, investment management and exit. The case studies cover a variety of strategies from debt, real assets, private equity and public equity, with investment examples across different regions that target different SDGs. Each case study covers the fund structure, motivations for the investment, SDG integration, investment example, advice for other investors and the outlook for the industry.

What the reviewer found helpful: “The consistent structure of the case studies and how each manager is integrating SDG considerations into the investment process was particularly interesting” Chloe Mallo

intermediate
Impact Investing Market Map (opens new window)

United Nations Principles for Responsible Investment

Reading time: 8-10 hours

Through this market mapping report, PRI adds clarity to the process of identifying impact investing companies and thematic investments so that asset owners and fund managers can better assess opportunities in the market. The Market Map also contains information about environmental and social thematic areas of impact investments and businesses that, by their nature, intend to contribute to sustainability and the SDGs.

What the reviewer found helpful: "The Market Map targets companies and businesses (in the real economy) that operate in the impact investing field, not just (impact funds) or investment vehicles." Kate Munuka

advanced

Growth drivers and constraints 

Creating Impact: The Promise of Impact Investing ( Chapters 2.4 and 3, pp63-7) (opens new window)

International Finance Corporation

Reading time: 20 minutes

The chapters cover some of the main challenges and solutions currently facing the impact investing market. Chapter 2.4 covers some of the regulatory barriers that impact investors may face, particularly with regards to fiduciary duty and the balance of considering ESG factors alongside in some cases regulatory requirements to maximise returns. Chapter 3 looks into some of the challenges faced in scaling up the impact investment market and how the industry can address these to attract more capital.

What the reviewer found helpful: “An interesting case is put forward for the role that impact investment can play while meeting fiduciary duty” Chloe Mallo

intermediate
Growing a culture of impact investing in the UK - final report (pp. 8-30) (opens new window)

Implementation Taskforce

Reading time: 90 minutes

The Task Force identifies a virtuous cycle made up of eight key stakeholders/elements that the task force considers need to act positively together to grow the impact investing market in the UK. The report also provides insight into the roles various stakeholders must play in growing the impact investment market The report also provides an overview of how the Impact Investment Institute was established

What the reviewer found helpful: "The insights on how each stakeholder/element of the virtuous cycle can positively contribute to the growth of the impact investment market." Kate Munuka

intermediate