Canada’s impact investing in emerging and developing economies grows 114 per cent
Canadian assets directed toward impact investment in Emerging Markets and Developing Economies (EMDEs) have grown by 114 per cent since 2019, representing a 13 per cent compound annual growth rate.
Almost half (46 per cent) of the investment is deployed in Latin America and 34 per cent in Africa.
The second State of the Sector report highlights a significant improvement in climate finance, gender-lens-investing and impact measurement.
This growth is mostly government-led, with 92 per cent resulting from increased spending by Canada’s development finance institution, FinDev Canada.
Regulatory, market and knowledge barriers limit Canadian private impact investing in EMDEs.
One key challenge is to revisit the Canadian view of institutional investors’ fiduciary duty, considering that long-term systemic risks and social outcomes are prudent, rather than secondary.
The concept of fiduciary duty varies significantly among jurisdictions, influencing the flow of private impact investing. Moreover, in EMDEs, Canadian investors experience a knowledge barrier with the specifics of the local economies.
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