“I think there’s an assumption that impact investing is a very niche space that is only for family offices that have mission-based endeavours or foundations,” says Reid.

“But what’s shifting, even in the superannuation and university endowment spaces, certainly in the foundation space, is a growing stakeholder expectation to do both –to invest in our retirement and invest for the long term and actually allocate that capital in a way that has a positive rather than a negative impact.”

Daniel Wiseman, head of Asia-Pacific policy at the Principles for Responsible Investment (PRI), a global body aiming to promote responsible investing, says the concept of what impact investing is has evolved beyond something that was considered quite niche and confined to a couple of specific asset classes and investment styles.

“Mainstream investors like insurers and superannuation funds have started to look at what impacts their investment strategies can have across entire portfolios, not just small components of it,” he says.

“They’re taking a view where all investment activities can have either positive and negative impacts. The question is increasingly not whether or not to do it, but how to do it and optimise it.”

Impact investing was traditionally mostly confined to private markets, private equity and alternative asset classes, where it was often easier to measure the societal or environmental impacts an investment was having. But these sorts of investments are also now stretching across debt and equity markets as well.

The problems impact investing seeks to solve often revolve around the United Nations’ 17 Sustainable Development goals, which include eliminating poverty and hunger, proving clean water and sanitation, affordable and clean energy, and sustainable cities and communities.

A recent report on impact investing by Mercer, Raising your impact ambition, identifies the scale of some of these problems and the investment opportunity in solving them.

For instance, the global demand gap for fresh water will grow by 40 per cent by 2030 while energy demand will increase by 50 per cent.

All up, there are $US12 trillion in growth opportunities for investors, including $US2 billion in providing transport systems; $US1.7 billion in new healthcare solutions; and $US1.3 billion in energy efficiency, the report states.

Reid says it’s important that positive outcomes can be measured, not only to ensure impact investments are what they purport to be, but also because quantifiable impacts make impact investing more attractive.

“You’ve got fund managers putting strategies together now that will be able to tell you this is the number of kilowatts of renewable energy they’ve delivered; this is the number of people that have been employed in this particular area; this is the amount of sustainable agriculture,” Reid says.

“The actual quantification of those stories and the way reporting is being delivered is really appealing, so for investors to be able to say I’ve allocated this capital and I’ve generated a return, plus I can really quantify the impact of what that has done is an attractive proposition.”

Fund managers are thinking more creatively about impact investing, focusing on issues including affordable housing and healthcare, in addition to tackling climate change, which is what a lot of people think about when they consider investing for good.

For investors, the starting point is identifying impact intentions and investment objectives.

“Is it broad-based impact across multiple social and environmental issues? Or is the preference to target impact in a particular region or on a particular issue? And of course what are the return expectations and asset class possibilities, given each investors’ objectives and existing portfolio exposures? In order to achieve these intentions, investors need to consider which fund managers have the investment strategies that can fulfil their objectives, including reporting on outcomes,” Reid says.