Impact investing has seen rapid growth in Asia over the past decade, as investors look to generate positive social and environmental impact alongside financial returns. Key factors driving this growth include rising interest from mainstream financial institutions, supportive government policies, and the emergence of new impact investing intermediaries and ecosystem builders across the region. However, the industry remains relatively small and fragmented compared to more mature markets like North America and Europe. This article will provide an overview of major developments in Asia’s impact investing landscape, highlighting key players and trends shaping the future of impact capital in the region.
Mainstream banks and asset managers launching dedicated impact investing products and funds
In recent years, major banks and asset managers like UBS, Credit Suisse, JP Morgan and Macquarie have set up impact investing teams and launched branded funds focused on social enterprises and sustainability-themed investments across Asia. For example, UBS manages over $5 billion in client assets using sustainable investing strategies across the region. Macquarie established its impact investing arm in 2016 and has deployed over $500 million into sectors like renewable energy, sustainable agriculture and financial inclusion. Large institutional investors like pension funds and insurance companies are also starting to allocate capital towards impact strategies. Governments are playing a key role by providing supportive policies as well as co-investing into new social impact funds focused on local priorities.
Development finance institutions anchor early-stage impact investing capital
Major development finance institutions (DFIs) like the IFC, ADB and DEG have been instrumental in catalyzing Asia’s impact investing industry. As early movers, theirAnchor financing has reduced risk and catalyzed local fund managers to launch dedicated impact investing vehicles. For example, the IFC committed $25 million to the Livelihoods Carbon Fund, while DEG provided $12 million to the Samridhi Fund — both focused on poverty alleviation through sustainable agriculture and clean energy. Beyond direct investing, DFIs have also supported the ecosystem by financing technical assistance programs like resource centers and accelerators for impact entrepreneurs.
New impact investing intermediaries emerge across Asia
Specialized impact investing intermediaries are emerging across Asia to connect capital with investment opportunities. For example, India’s Aavishkaar Group manages multiple social impact funds totaling over $1 billion in assets focused on financial inclusion, agriculture, healthcare and education. Indonesia’s East Ventures is an early-stage VC backing dozens of social enterprises across the region. Philippine-based Impact Investment Exchange (IIX) launched the world’s first Women’s Livelihood Bond and operates equity crowdfunding platforms for retail impact investors. Although fragmented, these intermediaries are building local impact investing ecosystems across Asia.
Industry networks advocate for enabling policies and knowledge sharing
Networks like the Asian Venture Philanthropy Network (AVPN) and ANDE have played a crucial role in advocating for supportive government policies, industry standards and knowledge sharing to strengthen Asia’s impact investing ecosystem. For example, AVPN’s policy working group has provided recommendations to regulators in several Asian countries to introduce new legal forms for social enterprises. ANDE’s regional chapters organize workshops and training programs to build impact management capabilities. The Impact Investment Exchange (IIX) and the Global Steering Group for Impact Investment (GSG) have also convened global events in Asia to connect local champions and share best practices.
Impact investing in Asia has achieved significant growth thanks to rising participation from mainstream financial institutions combined with strong anchor support from DFIs and engagement from industry networks. However, the market remains fragmented and small-scale compared to other regions. There are still gaps in intermediation capacity, policy frameworks and impact measurement. Stronger coordination amongst stakeholders can help scale quality deal flow and unlock more private capital towards the SDGs.