The role of trust in impact investing

Is private equity ready for the rise of impact investing?

Spurred by shifting societal expectations about the role and responsibility of business in the larger world, impact investing is part of a larger movement that deepens the sense of purpose of the financial markets and raises the bar for responsible business and investment. This undertaking presents an immediate opportunity for private equity funds and investors, if done with authenticity, transparency, and the true integration of impact throughout the investment lifecycle.

To inform our report, we sought insights from senior private equity executives and investors to understand the key factors that drive impact investing activity and support the continued growth and success for the market.

In exploring these topics with those at the forefront of the industry, we found consistent viewpoints on:

• What motivates private equity impact investors.
• What it takes to succeed as an impact investor.
• Strategic steps for earning trust in impact investing, enabling it to reach its full potential.

These conversations both validate and fuel KPMG’s point of view that impact investing represents the future of investing, and private equity can help it scale. General partners and limited partners have a core role to play in supporting the growth of companies that operate in a way that has positive impact on society and the environment. Trust must be earned not only at the fund level, but across the impact investing ecosystem, requiring the collaboration of all stakeholders to reach more investors, and support the development of standards and guidance that bring greater consistency and accountability to impact investing.