Impact investing and philanthropy can jointly address Asia’s most pressing challenges

AS GLOBAL challenges such as climate change loom, social investments are critical to fill the US$3.9 trillion financing gap to reach the Sustainable Development Goals in developing countries. In addition to philanthropic capital to help plug this gap, impact investing is gaining traction with the market reaching an estimated US$1.16 trillion in 2022. Families increasingly recognise that integrating their philanthropic and investment capital, which can assume higher risk for asymmetric societal gains, achieves greater impact. When families harness their expertise and networks across their portfolios, cross-pollination opportunities abound.

In Asia, these trends have enormous potential. Among 42 per cent of Asia-Pacific family offices, sustainable investing is expected to increase from 29 per cent to 50 per cent of their portfolios within five years.

The Milken Institute released a report on Unlocking Asian Philanthropy and a white paper on Single-Family Offices which highlighted that Asian families have not fully integrated their impact investing and philanthropy. With Asia set to become the world’s second largest wealth hub by 2026, the time is ripe for supercharging social investment to accelerate global change.