Annual Investment Update 2023: Assessing impact bonds

Impact investing targets positive, measurable social and environmental impact over a longer-term investment horizon. Although impact markets have been dominated by green bond issuance, this is changing and there has been a rapid growth in broader social bond issuance over the past five years. Even within green bond markets, the number of sectors issuing has broadened considerably, allowing greater diversification and more targeted investment. Greenwashing is a real problem – Insight assesses impact bonds for their likelihood of achieving the social or environmental good they offer and we gave only 26% a top rating in 2022. Impact investment offers greater transparency in terms of how proceeds are used, and issuers often provide performance updates which allow investors to understand the impact being made.