A wave of new capital is set to reshape impact investing – but only if investors can trust what the market is promising. Over the coming decades, an estimated $3.5 trillion is expected to change hands as part of an unprecedented intergenerational wealth transfer. At the same time, more investors are looking beyond financial returns alone, seeking opportunities that also generate measurable social and environmental benefits.

As impact investing grows, so too does the number of funds and financial products promising to deliver positive change. But with billions of dollars potentially flowing into the sector, a fundamental question is becoming increasingly urgent: how can investors be confident those claims stand up to scrutiny?

One of the biggest challenges is that growing enthusiasm has also brought a great deal of hype, according to Professor Danielle Logue, Director of the UNSW Centre for Social Impact. As larger pools of capital begin flowing into the market, building trust will become more important than ever. 

"Impact investing sounds wonderful – it could almost be a market of good intentions," she says. "But if we don't provide solid, credible evidence around what this impact label means, the market is at a point where there's a huge regulatory and credibility risk there."

That challenge – how to build the evidence and market infrastructure needed for impact investing to mature – is the driving force behind the recently launched Asia Pacific Impact Investing Research Consortium (APIIRC), a partnership between the Centre for Social Impact and the School of Banking and Finance.

“To have a market that has credibility and trust, we need to help solve the market infrastructure problem as well,” says Prof. Logue, who jointly leads APIIRC alongside co-director Professor Francisco Barillas Bedoya, Head of the School of Banking and Finance. “There was a very clear role that UNSW Business School could play in contributing to building that market infrastructure, so that we have a market with credibility and trust in Australia and in the Asia Pacific region,” she says.

When good intentions aren't enough

The appeal of impact investing seems straightforward enough. Rather than focusing exclusively on financial returns, investors seek opportunities that also generate measurable positive social or environmental outcomes.

That might mean financing affordable housing, renewable energy infrastructure, community development projects or First Nations enterprises. Increasingly, mainstream financial institutions are recognising that investors want portfolios reflecting both their financial goals and broader values.

Yet defining impact is much harder than defining investment returns. And as the market grows, attractive labels alone are no longer enough.

Learn more: Impact investing in Australia: What investors need to know in 2026

Recent years have already seen growing scrutiny of environmental claims across financial markets, with regulators in Australia and overseas increasing their focus on greenwashing. Similar concerns are emerging around "impact washing", where investments are marketed as generating positive social outcomes without robust evidence to support those claims.

For investors, uncertainty creates hesitation; for markets, it creates risk. "It's so important to understand what the impact is, what's behind the label, how it is governed and how it is evidenced." Prof. Logue says. "If there is no credible research and evidence that is publicly available, this space will collapse.”

Measuring what matters

Financial returns have long-established metrics. Investors can compare profitability, volatility and risk across markets using widely accepted measures.

Social impact is considerably more complex. How should investors compare affordable housing with renewable energy? How should community wellbeing be measured? What evidence demonstrates that an investment genuinely created positive change, rather than simply funding something that would have happened anyway?

"Impact is a nebulous concept," Prof. Barillas Bedoya says. "One of the consortium's key contributions will be clarifying what impact is and what is not." And while the financial elements of impact investing are important – "it starts with the financing of impact" – the more difficult question is what those investments actually achieve. That's not, per se, a finance question," he says.

Nor is it simply an Australian challenge. "It's a global question," according to Prof. Barillas Bedoya – one in which Australia, and the broader Asia-Pacific region, have an opportunity to help shape debates about measurement, transparency and trust that are increasingly shaping impact investing, with researchers internationally exploring similar issues as the market expands.

‘Translating to each other’

These challenges prompted the creation of APIIRC, the $1 million research initiative launched by UNSW Business School in May with support from Minderoo Foundation and UBS. According to Prof. Logue, UNSW Business School was well placed to “be a research leader in this space, working with industry to build a trusted, credible public evidence base”.

“We also wanted to work with partners that understood the mainstream capital markets and what was happening there,” she explains. “We were really at this intersection, so it made absolute sense to work with the leading scholars in the School of Banking and Finance. But in order to do research that drives change at scale, it’s important to work closely with the leading industry players as well.”

"It's so important to understand what the impact is, what's behind the label, how it is governed and how it is evidenced"

DANIELLE LOGUE

APIIRC has strong early support from not-for-profit organisations, family offices, and one of the largest philanthropic organisations in the country. “We’re also really proud that, as a flagship initiative for the Business School, we have brought together our two components, plus our colleagues in Risk and Actuarial Studies and in Management & Governance, because all of that expertise matters,” Prof. Logue says.

“We’ve got people coming at this problem – this market we’re trying to build – from different disciplines and different types of institutions.”

For Prof. Barillas Bedoya, bringing those different perspectives together is essential because no single discipline can answer the questions that impact investing now faces. "We can bring the finance expertise, but impact is more nuanced. That's why this needs to be a Business School initiative,” he says.

“The Centre for Social Impact, on its own, might understand the problem, but lacks expertise in a given field. Some of us have the expertise but lack understanding of the issues,” he adds. “Our collaboration is critical to bringing together these parties that don’t speak the same language. In a way, we’re translating to each other.”

Building the evidence base

Much of APIIRC’s work will focus on producing evidence that investors can actually use.

One key initiative is the Centre for Social Impact's Benchmarking Impact Survey – the largest annual impact investing study in Australia, which Prof. Barillas Bedoya credits with "starting to put some structure around what impact means". Produced in partnership with Impact Investing Australia, it combines an investor survey with a detailed scan of the impact investment market.

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"There's research in finance doing impact, but we don't have that broad overview of other fields," Prof. Barillas Bedoya says. "The richness of the Benchmarking Impact Survey is unique because it allows us to measure things more appropriately than what people in finance or industry have been able to do, and to contribute to that debate."

The survey represents one of three key pillars of APIIRC's work, alongside world-class research and education. By building a consistent evidence base over time through both the survey and a specialised longitudinal dataset, researchers hope to improve measurement frameworks and better understand how the market is evolving – as well as how best to foster expertise in future leaders.

"If we do this right, we will be able to increase the amount of funding that goes into impact, because whether it’s investors or philanthropy – whoever it might be – they will understand where their money is being allocated,” Prof. Barillas Bedoya says. “Right now, they feel really unsure."

From confidence to capital

If better evidence can strengthen confidence in impact investing, the next challenge is turning that confidence into investment.

Prof. Barillas Bedoya believes many investors are already looking for opportunities that align financial returns with positive social outcomes. The financial sector has responded with a growing range of sustainability and impact products, with demand driven in part by formal investment mandates. "A big part is also that people themselves want to do the right thing, whether it's mandated or not," he says. "We already see that they are doing it themselves – even when it's not clearly defined."

That uncertainty is exactly what the consortium hopes to address. "Our goal is to understand and educate society broadly – not just consumers, but also superannuation, institutions, governments – on what impact investing means," says Prof. Barillas Bedoya. "If they have clarity, they will have confidence to allocate funds towards that. I think that's how we're going to unlock capital, ultimately."

The timing may prove particularly significant given Australia's coming intergenerational wealth transfer, which Prof. Logue says will see women play a much larger role in shaping where wealth is invested. "The key point there is that the transfer of wealth is going to be huge for women, with a huge increase in women owning and controlling wealth and its distribution across family offices," she says.

Understanding the appetite for impact investing among family offices and other investors – and what evidence they need to confidently allocate capital – forms an important part of the consortium's research agenda.

Challenging assumptions about returns

The consortium also hopes to contribute to one of impact investing's most persistent debates: whether pursuing positive social outcomes necessarily comes at the expense of financial returns.

Affordable housing and renewable energy provide two examples of where that assumption may not hold. With the right financing structures and investment horizons, both can generate competitive returns while delivering significant social or environmental benefits.

"Imagine, then, if you could tell people: ‘You can have your cake and eat it, too.’ You want to do good, and you can do even better [financially] by doing good than by not”

FRANCISCO BARILLAS BEDOYA

"It's the idea that impact does not equal lower return, necessarily; in fact, it might be the opposite," says Prof. Barillas Bedoya. "Our role is to highlight where it would be easier for us to unlock capital to begin with, and to point out where things have a lot of social value but maybe not as much economic return, and then fill those gaps."

The consortium's research will examine where private investment can successfully deliver both impact and competitive returns – and where government or philanthropic funding remains necessary because market incentives alone are insufficient.

Rather than viewing financial performance and social outcomes as competing objectives, researchers hope to identify ways they can reinforce one another. “Imagine, then, if you could tell people: ‘You can have your cake and eat it, too.’ You want to do good, and you can do even better [financially] by doing good than by not,” Prof. Barillas Bedoya says.

Beyond research

Research may sit at the consortium's core, but its work will also inform teaching and industry engagement, including a new impact investing course within the UNSW School of Banking and Finance’s forthcoming Bachelor of Advanced Finance, which will feature some courses co-taught with industry. "If we are known as leaders in impact investing – not just in academic, industry and government circles – that will be a success,” says Prof. Barillas Bedoya.

Prof. Logue's vision is similar, and she agreed with Prof. Barillas Bedoya that “the key point here is getting the clarity to give the confidence”, while working with anchor partners to democratise access to impact investing. "This is really about showing that we are a trusted, credible source and are actively contributing to building the market infrastructure that's needed to provide the clarity and confidence to unlock capital,” she says.

Learn more: CSI’s Danielle Logue on how to best invest for social impact

"As a university, we're an extremely important player in this space. And in five years, I would want to see that we have seriously contributed to the standing of universities and university work in this space, and, more broadly, in society, that our public contribution in this work is very visible.”

Billions of dollars are already seeking investments that promise both financial returns and positive social outcomes. Whether those ambitions translate into lasting impact will depend not only on investors' willingness to act but also on the quality of the evidence guiding their decisions. For APIIRC, the opportunity is not simply to encourage more impact investing, but to help build the trusted market infrastructure that allows it to fulfil its promise.

The consortium is working with researchers and industry partners to advance its research, education and benchmarking agenda. To learn more about the consortium or explore opportunities to engage with its work, visit the Asia Pacific Impact Investing Research Consortium website.