ndonesia is experiencing a surge in impact investing, an investment approach that seeks to effect positive change alongside financial returns, thanks to growing awareness of environmental, social and governance (ESG) issues.
While positive social or environmental outcomes from any investment are commendable, true impact investing requires intention, according to David Soukhasing, managing director of Angel Investment Network Indonesia (ANGIN).
“Impact investing is investment you make to intentionally generate a pressure of environmental effect,” Soukhasing told The Jakarta Post on Friday.
“If your investment somehow creates an impact and you’re happy about it, that’s good investment but not impact investment,” he added.
According to a 2023 Intellecap report on impact investing in Southeast Asia, private impact investors in the region deployed 40 percent more capital in 40 percent more deals between 2020 and 2022 compared to the preceding three years.
Indonesia has emerged as a regional leader in impact investing, attracting nearly 44 percent of deals by volume and capturing 55 percent of private impact capital in 2020-2022.
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This translates to private investors pouring US$347.5 million into 100 deals, with development finance institutions contributing an additional $1.07 billion.
