Private equity firm TPG recently announced it had raised $7.3 billion for its climate-focused impact fund, one of several such funds it has launched since 2016, making it "one of the biggest private equity firms to offer an alternative to pure profit-seeking," per the Financial Times.
But critics aren't so sure impact investing, which seeks to do good while generating a profit, is all it's cracked up to be.
The World Bank's International Finance Corporation has called on asset managers to disclose how they define and measure the social or environmental impact they claim to produce alongside financial returns, and the European Securities and Markets Authority has proposed that funds using "impact" in their names must make clear how they generate a positive and measurable social or environmental impact alongside a financial return.
"The returns on renewable energy projects are pretty low these days, partly because they are very low risk," a Columbia Business School professor tells Bloomberg.
"Some of these sectors, like renewable energy, have become so successful that it becomes challenging to get those returns," he adds.
" private equity firms offering impact investments must now address concerns about greenwashing, too.
The Securities and Markets Stakeholder Group, a body that advises Esma, said in January that firms offering impact funds should 'only
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