Large corporations invest approximately $2.4 billion annually in initiatives and ventures designed to achieve financial returns as well as positive economic, social, or environmental impact, a study from CECP finds.
The report, Investing With Purpose (24 pages, PDF) — the first, according to CECP, to analyze the corporate role in impact investing in depth — found that a third of companies globally report being "somewhat" or "highly" active in impact investing, with the median total giving figure for companies that are active significantly larger ($25.7 million) than the figure for companies that are not ($15 million). While the financial services industry was one of the most deeply involved in impact investing, active engagement was found to be widespread across the economy, particularly in manufacturing, consumer essentials, and technology.
In addition to offering corporations a road map for how to start an impact investing program, the report outlines six corporate approaches that companies are taking, including direct investments, self-managed funds, third-party funds, strategic alliances, accelerators and incubators, and corporate foundations. And while the report found impact investing to be the exception rather than the rule among corporate funders, CECP expects the practice to become more common as the broader global market for impact investing grows.
"We are at the start of seeing something that has the power to change the world," said Daryl Brewster, chief executive of CECP. "Impact investing is the cutting-edge tool for companies looking to achieve financial, environmental, and societal goals — all at the same time. We expect more leaders in corporations to leverage their companies’ resources and competitive advantages through impact investing. Ultimately, this will make a positive impact in the marketplace and in people's lives."