Navigating the impact investing landscape: history, trends, and future directions

This note explores the evolving landscape of impact investing, which seeks to integrate financial returns with social and environmental benefits. Originating in the early 2000s, the sector has grown robustly, driven by diverse stakeholders, including philanthropists, private equity investors, and governments. The note delineates the sector's historical development, key differences from ESG investing, and how its four defiig criteria are translated into actual investing practices. Challenges such as measuring true impact and ensuring genuine additionality are also discussed, highlighting the need for rigorous frameworks and genuine commitments to social outcomes.