Impact Investing in Canada: State of the Nation Report
By Betsy Moszeter and Karim Harji
As interest and activity around impact investing continues to grow throughout the world, so does the demand for information about trends and opportunities. The State of the Nation Report (executive summary / full report) provides information and analysis that can inform both new and existing actors in the impact investment sector in Canada.
The State of the Nation report responds to a need to better understand the nature of impact investing activity in Canada, the ways in which it is evolving and maturing, and the areas in which it could grow or falter. While there has been strong interest in and appetite for the Canadian impact investing market, it faces a significant information gap. As such, a robust analysis of the state of impact investing in Canada provides decision makers with critical information to identify, assess, and benchmark the impact-investing ecosystem and its constituent parts.
This report has several related objectives:
- Describe impact investing and how it is developing across the country.
- Assess current impact investing activity across sectors, regions and asset classes.
- Share examples of investments that integrate financial returns and social impact.
- Identify trends, issues and challenges across market segments.
- Prioritize recommendations to allow impact investing to fulfill its potential.
The key trends and opportunities identified in the report include:
- Impact investing in Canada is characterized by a wide range of motivations, approaches and organizations.
- Overall activity continues to show signs of growth in terms of capital and product growth.
- Promising examples for enabling structures and conditions for impact investing exist.
- There is a misalignment between capital and opportunity; more often than not, entrepreneurs continue to identify finance as a key barrier to growth, and investors continue to rank deal-flow and investment readiness as a fundamental issue.
- Creating the conditions for all market actors to harness the potential of impact investing will require coordinated action within and across sectors and regions.
As the first of its kind in Canada, this report is an important contribution toward a robust and integrated marketplace and should provide a solid foundation on which to build in years to come.
We at First Affirmative applaud Purpose Capital and the MaRS Centre for publishing such an in-depth report, and we look forward to November 2014 when The Forum for Sustainable and Responsible Investment, US SIF, publishes the 2014 biennial Report on Sustainable and Responsible Investing Trends in the United States.
Karim Harji is a co-founder and partner at Purpose Capital. Betsy Markus is Senior Vice President of First Affirmative Financial Network. Both work with investors, advisors, foundations, and financial institutions to align their mission-driving values with their investment strategies.
Posted: May 7, 2014