The UK impact investing market has seen substantial growth and increasing sophistication in targeting positive social and environmental outcomes, having reached £76.8 billion (US$101.2 billion) as of the end of 2023. A new report from the Impact Investing Institute noted this marked a £19.3 billion increase and a 10.1% compound annual growth rate since the beginning of 2021 – significantly outpacing the broader UK asset management sector, which has an annual growth rate between –2% and 0% over the same period. Following a market survey and engagement with over 100 market players, thought leaders and policymakers, the institute determined that the resilience of impact investing demonstrated the increasing importance investors are placing on impact strategies in the UK financial landscape. “The continued growth of impact investing in the UK demonstrates the potential to transform capital markets to support a fairer, greener, more resilient future,” said Kieron Boyle, CEO of the Impact Investing Institute. “It invites all to transform capital markets to support a fairer, greener, more resilient future [and] all stakeholders […] to participate in building a future where financial success and positive impact are inextricably linked.” Private equity attracted the highest proportion of impact capital (45%), followed by real assets (28%) and private debt (11%). Demand for impact investing has also increased among institutional investors, with the UK’s Local Government Pension Scheme (LGPS) making more local impact allocations. Two-thirds of survey respondents said they planned to increase or sustain their capital allocation towards impactful companies, projects, and assets in the UK over the next five years. The UK market now accounts for around 8% of the global impact investment market.
