$60 billion impact investing industry becomes mainstream

Impact investing or investing to generate a positive, social and environmental impact, has become a mainstream investment choice, and is predicted to become a $1 trillion dollar industry by 2020, according to Standard Life Investments.

The global investment manager's whitepaper found 80 per cent of those who lived in the United Kingdom thought human rights, equality and eradicating poverty were important considerations when investing, while 80 per cent of their surveyed participants also did not want to sacrifice investment performance when they invested into values-based funds.

Those under 40 were also more likely to use values-based investing, and were familiar with the term impact investing.

The report highlighted that in 2015, around $60 million was invested into impact investing around the world. That was tipped to rise to $1 trillion by 2020.

Morgan Stanley said this growth would likely be driven by millennials (18-to-34-year-olds) who wanted socially responsible, values-based investments, as they were twice as likely to invest in portfolios that had positive and environmental or social impacts.

Standard Life Investments' head of responsible investment, Amanda Young, said: "For asset managers and advisers that embrace impact investing and offer suitable products to cater for this market, the future looks bright".

"As we move forward, we will no doubt see a wider range of investment vehicles, as well as more diverse impact targets. Measurement will also become increasingly sophisticated and standardised," she said.