New Delhi: The Global Impact Investing Network (GIIN) published the sixth edition of its Annual Impact Investor Survey on Wednesday in New York City.

Produced in partnership with JPMorgan Chase & Co. and with support from the UK government through its Department for International Development’s Impact Programme, the survey examines information around investor (including fund managers, foundations, banks, development finance institutions, pension funds, etc.) perspectives, and highlights respondent views on topics such as impact measurement, liquidity and investment decision-making processes.

According to Amit Bouri, CEO, GIIN, vis-a-vis the fifth survey, one key finding to highlight in the current edition is “the significance of impact measurement to investors, which has been consistently noted across recent surveys. In this year’s survey, 99% of respondents report measuring their impact and 65% are using IRIS, which is GIIN’s catalog of social and environmental metrics (or language of impact)".

To collect data, 158 impact investors from across the world were contacted and had to respond to a survey distributed between December 2015 and February 2016. They were expected to answer questions in relation to their activities since inception, specifically in 2015 as well as plans for 2016.

According to the survey, respondents committed a total of $15.2 billion to 7,551 impact investment deals in 2015 and plan to increase capital committed by 16% to $17.7 billion in 2016 and the number of deals to 11,722.

How the number of impact investing deals will go up by 55% when the increase in capital committed will be go up by just 16% finds no clear answer. “We don’t have further information on this. This is a survey and so we didn’t interview investors about their detailed plans. However, as an aggregate estimate it generally shows investor optimism in completing more deals (that would be smaller on average if the estimates turn out to be true)," Bouri said.

As far as capital allocation is concerned, geographically North America, Sub-Saharan Africa (SSA), Latin America and the Caribbean (including Mexico) were on the top in 2015 but 55 respondents indicated that they are interested in increasing capital allocation to East and South-East (ESE) Asia and South Asia in 2016.

“While 25 investors plan to increase allocations to South Asia and 30 plan to increase to ESE Asia, 40 plan to increase their allocations to SSA. This is consistent with what we generally see in the market—interest in making impact investments in a range of geographies with a particular interest in emerging markets. Overall, investors are looking at a variety of sectors and geographies, which is an interesting finding and signifier of growth and depth, but also breadth," Bouri said.

Amit Bhatia, CEO, Impact Investors Council, the industry association of impact investors in India, believes the country will be the biggest beneficiary of this thrust towards South Asia/South-East Asia.

“The world’s largest development finance institutions and most prominent impact investors are already active in India and offer great endorsements. Three very successful recent IPOs (initial public offerings) of social enterprises (Narayana Hrudayalaya Ltd, Equitas Holdings Ltd and Ujjivan Financial Services Ltd) are evidence that India has a deep social economy and social enterprises can scale and be successful in public markets," he said.

Globally, the most commonly targeted social and environmental themes in impact investing, according to the report, are access to finance, employment generation, health improvement and clean energy. Bhatia said the same are expected to top the list of sectors receiving investments in India.

“Impact investing is ripe for special attention, from two economic and social imperatives—creating jobs and alleviating poverty. If the government can recognise this asset/investment class, allow philanthropic or corporate social responsibility (CSR) money to move in seamlessly, and, collaborate closely in reforms, impact investing can cross $1 billion annual levels by 2020, up from $508 million in 2015 in India," he added.

The survey highlights that Axis Bank, India’s third-largest private sector bank, had announced in September 2015 that it will adopt an impact investing approach to its CSR spending, which the report says is indicative of the growing interest in the field. “I feel its great to have banks interested in impact investing. Axis Bank, for example, has declared that it will adopt an impact investing approach to its spending on CSR. This approach includes the intentionality of addressing a developmental issue, measuring the outcomes, efficiency, and sustainable impact. Currently, CSR funds cannot be used to make a direct investment but discussions are underway to see how this can be done," said Anil Sinha, advisor South Asia, GIIN.

After a recent visit to India by Ronald Cohen, chairman of the Global Social Impact Investment Steering Group and a proponent of impact investing, there has been as Bouri puts it “a steady drumbeat of interest and activity as this market continues to take shape. In India, we are seeing an increase in interest and enthusiasm. Overall, impact investing is a market exploding with opportunities across geographies—India and South Asia included—and investors are eager to explore these opportunities".

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