Impact Investing still remains a peripheral strategy to most investors in Europe but one that is growing in importance. Impact investing markets in Europe are heavily influenced by local history and socio-political structures.

In particular, the structure of local social and financial systems, which determine the mix of private and public capital, play a key role. The impact investing markets thus vary greatly from country to country. The lack of reliable statistical data on the impact investing market in Europe is a known weakness. The exact size of the impact investing market is thus hard to estimate.

Various estimations exist:

A series of high level events and international agreements have pushed sustainability themed investments to feature heavily in investors’ strategies. The preferred themes relate mostly to energy efficiency and renewable energy, very much in accordance with the Global Climate Conferences. 

The European Commission has been active promoting impact investing, as part of the EU’s 2030 targets to achieve a 40% cut in greenhouse gas emissions. In order to mobilize financial markets to contribute to this goal, the EU’s High-Level Expert Group on Sustainable Finance has set ambitious targets to promote ESG investing, including, amongst others, the following targets:   

1. A classification system, or ‘taxonomy’, to provide market clarity on what is ‘sustainable’
2. Clarifying the duties of investors when it comes to achieving a more sustainable financial system
3. Improving disclosure by financial institutions and companies on how sustainability is factored into their decision-making
4. An EU-wide label for green investment funds
5. Making sustainability part of the mandates of the European Supervisory Authorities (ESAs)
6. A European standard for green bonds.