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Environmental Impact Assessment

The literature on impact investment tends to focus more on its financing of social initiatives, and it has helped fund affordable housing, care for the elderly and educational opportunities, among many other products and services.
However, it seems that there is growing interest from investors in creating environmental impact, through investments in a wide range of sectors including clean tech, green construction, land remediation, sustainable forestry and biodiversity conservation.

Analysts have pointed to growing market demand for products and services that do not simply minimise harm, but have positive impacts (Conservation Finance Alliance, 2014) – products and services which ‘demonstrably make the world a better place’This Future Brief focuses on available research into impact investment. It should be noted that the majority of literature on this specific topic is not peer-reviewed,studies are typically small-scale and industry reports are more prolific than academic papers. It has been argued that academic research is currently hampered by the lack of large, quality datasets, although this could be said to reflect
the field’s emerging nature. To inform environmental impact investing in Europe, the report draws on wider literature concerning social impact investing and socially responsible investment from around the world.

The term ‘impact investment’ is new, coined in 2007 in the USA although the concept itself is older and various other terms are used to broadly refer to the same idea; these include ‘social investment’, ‘social impact investment’ and ‘blended value’. This rapidly growing sector is diverse and encompasses a wide range of investing organisations, investees and models of finance.