The relatively young market for impact investments—those that seek to have a positive effect on the environment and society—is continuing to expand at a steady pace as more players enter the market, the Global Impact Investing Network reported in its latest snapshot of the market released late Tuesday.

The 229 investors that responded to the GIIN’s eighth Annual Impact Investor Survey held about US$228 billion in assets as of the end of 2017, a figure the U.S.-based nonprofit describes as a conservative measure of a market largely focused on private investments. For 2016’s survey, the GIIN surveyed 209 organizations with US$114 billion in assets. While not comprehensive, the annual survey “represents the largest exercise of its type in the market,”says Abhilash Mudaliar, the GIIN’s director of research.

A better barometer of the sector’s growth comes from a subset of 82 respondents who have participated in the survey since 2013. These investors experienced a compound annualized growth rate in assets under management of 13% a year. In their impact investments, these investors collectively held US$50.8 billion in assets in 2017 from US$30.8 billion in 2013. “Once we account for new entrants to the market it would show the industry is growing at a rate even faster than that,” Mudaliar says.

One clear sign of the market’s youth, and the fact that it is likely to grow, is more than 50% of all the respondents made their first impact investment within the last 10 years. While most of the respondents are fund managers, managing nearly US$72 billion in impact assets, they are largely investing on behalf of wealthy individuals and family offices as well as foundations, the GIIN survey found. Family offices making direct investments for impact represented 4% of respondents. About a quarter of investors who responded invest mostly via private equity (26%) and private debt (24%) vehicles. The top impact sectors are financial services (19%), energy (14%), microfinance (9%) and housing (8%), the survey found.

Most investors the GIIN surveyed are happy with the way their impact investments are performing, with 82% saying their investments have met their expectations for impact and 76% saying their investments have met their expectations for financial performance, the survey says. But the survey also looks at potential pitfalls. As the “mainstreaming of impact investing starts to pick up,” there’s a risk, says Mudaliar, that the integrity of the market could start to decline. To get at these risks, the surveys asks investors for their thoughts on the strategies for addressing “impact washing,” or the offering of investments that claim to have positive social and environmental impacts but may not actually be making a difference.

The best way to combat dilution in the impact investing market—and “mission drift” among investors—is to request “greater transparency from impact investors on their impact strategy and results,” 80% of survey respondents said, while 41% said “third-party certification of what qualifies as an impact investment” would help. “This is one of the areas where the GIIN is committed to investing more resources and beyond that, looking into more strategies to uphold integrity of impact investing,” by, for example, developing a set of principles for impact investments, Mudaliar says.

The survey also found that 84% of respondents who invest in both conventional and impact investments are making more impact investments compared to three years ago and 84% also said their organization “has a greater commitment to measuring and managing the impact of impact” of these investments. Only 6% said key decision makers at their organizations were more reluctant to make impact investments. “These findings are extremely encouraging and promising,” Mudaliar says.

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