The Size of Impact

What is the size of the European impact investing market?

The European private impact investing market — comprising both direct and indirect investments in unlisted assets — is estimated at €190 billion, 2.5% of the €7.6 trillion AUM considered eligible for impact investing in Europe.

What does growth in the impact investing market mean for solving social and environmental challenges?

The private impact investing market has shown notable growth, with investments in unlisted assets increasing from €80 billion to €190 billion over the past two years. As context for this doubling in size, stronger collaboration among the European Impact Investing Consortium amplified the market’s reach and coverage. The total direct investments in unlisted assets under management rose by 20% between 2022 and 2023, closely matching the 26% growth recorded in the previous period (2020-2021) and the 21% annual growth rate reported by the GIIN in their latest study. Progress towards achieving the SDGs is, unfortunately, far off track, with only about 17% on track to be achieved. However, the growth observed shows that impact investing is increasingly considered as a tool to develop new solutions that operate at scale.

How much of the investment provides additional  impact?

62% of investments have a positive impact that would not have happened without the investment

What does comparing impact investing across European countries reveal about the market?

The impact investing market in Europe is currently led by the United Kingdom, the Netherlands, and France, which hold the largest shares in terms of AUM. These markets have well-established impact investing ecosystems, supported by a robust regulatory environment, active investor communities, and a high degree of institutional engagement.

Several other western European countries — including Italy, Denmark, Belgium, and Spain — are making notable contributions to the impact investing sector. Meanwhile, Türkiye, Portugal and Greece, are emerging as nascent markets with promising growth potential.

Who engages in private and direct impact investing in Europe?

Venture capital and private equity (VC/PE) impact fund managers still represent the dominant category, representing 44.8% of the investors included in this study and holding 39.1% of direct AUM in unlisted assets. Their influence underscores the strong alignment of venture capital and private equity with the goals of impact investing.

What are the most common private asset classes for European impact investors? 

Private equity has emerged as the leading asset class in unlisted markets for impact investors, followed by private debt and real assets — such as social housing projects — and social outcomes contracts (SOCs).

What are the biggest funding sources for European impact investing?

Institutional investors, including pension funds and insurance companies, lead with 27% of total funding, followed by banks (22%).

Where does European impact capital flow?

45% of European impact capital is invested outside Europe, with a strong focus on Africa (18%), Asia (12%), and Latin America (8%).

What role do impact investors play in addressing the SDGs?

Impact investors target SDGs like Decent Work and Economic Growth (62%), Reduced Inequalities (55%), and Climate Action (46%).

What are the market standards for impact measurement and management?

All organisations included in the study are measuring impact, with 88% reporting clear evidence of managing impact — an increase from the 83% reported in 2022. Fragmentation in IMM strategies allows impact investors to tailor approaches to specific goals, sectors and regions, fostering flexibility and innovation.