Impact investing by small investors:The new normal?

Global challenges Impact investment

ABN AMRO and Triodos Investment Management, both Dutch banks, recently published a joint report. It is titled “Mobilizing Impact Capital from Retail Investors: SDG investing as the ‘new normal’“. The report highlights the notion that the financial industry is in a position to trigger the market-wide uptake of impact investing, by small individual investors in particular.

Both ABN AMRO and Triodos are fierce promoters of impact investing. They advance the idea that investment targeting the achievement of the Sustainable Development Goals (SDGs) should become “the new normal”. In their report, they express the hope that the examples they share will serve as “an inspiration for increasing the positive impact of retail investors’ money”.

Transformative potential
Retail investment refers to an investment made by a member of the public, rather than a business or financial organization. A retail investor is an individual who purchases securities for his or her own personal account. They typically trade in much smaller amounts than institutional investors such as mutual funds and pensions. Nonetheless, when added together, they represent a big potential.

“The Sustainable Development Goals have the potential to transform our world by 2030,” the banks emphasize in their joint report. And the growing impact investment market provides capital to achieve them.

ABN AMRO and Triodos believe that the involvement of retail and private banking capital is critical to broaden the SDG agenda to a wider audience

The SDGs – or global goals – are a set of seventeen goals and 169 underlying targets to improve life on earth. They address the world’s most pressing challenges in sectors such as sustainable agriculture, clean technology, microfinance, and affordable and accessible basic services including housing, healthcare, and education.

Changing the world by 2030
What’s at stake? To achieve the SDGs in 2030, more money needs to be allocated towards sustainable and inclusive solutions for global challenges. ABN AMRO and Triodos believe that the involvement of retail and private banking capital is critical to broaden the SDG agenda to a wider audience. This will create a possibility for individuals to act and mobilize the capital needed to achieve 2030 success.

According to both banks, the potential power of impact investing by retail investors should not be overlooked: “Next to a higher rate of participation of institutional investors, we should not forget the potential power of retail investors. Increasing the participation of retail investors in SDG financing can help bridge the multi-trillion Dollar gap between the current level of annual investment and the actual annual investments needed to achieve the SDGs.”

17 SDG's
ImpactCity supports the Sustainable Development Goals