The Dutch impact investing market has expanded over recent years, with assets under management (AUM) in impact and sustainable development goals-aligned investments growing by an estimated 24% in the 2020-23 period, according to the Netherlands Advisory Board on Impact Investing (NAB).

In its new market sizing report, the NAB said that Dutch stakeholders had invested assets worth some €203bn in impact or SDG-aligned strategies at the end of 2023. Of these, €52bn were impact investments and €151bn were classified as sustainable development investments (SDIs). The findings were based on a survey of 35 Dutch-based institutional and non-institutional organisations.

“These numbers are actually very impressive and show that over three years, huge momentum has been generated for impact investing in the Netherlands,”  Laure Wessemius-Chibrac, the NAB’s managing director, told Impact investor.

The numbers show that around 7-8% of total AUM by Dutch investors could be classified as SDIs or impact investments, compared to around 4-6% in 2020. Wessemius-Chibrac said the data indicates the market is “well on the way” to meeting a target of allocating 10% of AUM for impact investment, which the NAB has encouraged investors to meet by the end of 2025. 

The report is a follow up to the NAB’s previous market sizing report, published in 2022, which used 2020 data. In contrast to that publication, the current report splits up figures for SDIs and those for impact investment, based on current definitions. The NAB said that, in an evolving sector, it is necessary to take a more critical approach to the type of impact measurement used by investors.

Wessemius-Chibrac said that although many SDIs– a classification widely used in the Netherlands – most likely fits the definition of impact-aligned investments, how their impact is measured is not always clearly reported by investors. Consequently, the NAB has taken a conservative approach by separating out SDIs from impact investments.

However, she said there is clear evidence of growing enthusiasm for impact investing in the Dutch market.“One remarkable part of our findings is the number of organizations that have actually issued an impact investment target,” she said.

The survey showed 83% of respondents have formulated a clear target allocation for their impact investments, and noted that major Dutch institutional investors, including big insurers a.s.r., Achmea and VGZ, have committed to reaching the 10% target.

Wessemius-Chibrac said this shows that impact investing as a strategy is being incorporated more consistently into investment strategies and that action by major institutions should inspire others to do the same.

The NAB said that the fact that around a third of organisations responding to their survey hold more than €10bn in AUM demonstrates that Dutch institutional investors are increasingly including impact investment strategies in their portfolios. The rest of the respondents were equally split into organisations with less than €100 million AUM (28%), €100 million- €1bn AUM (28%), and €1bn- €10bn AUM (28%).

Private markets still account for 71% of total impact investments. However, the report highlighted the growth of impact investments in listed equities, which accounts for the other 29%.

“That’s a huge trend, which reflects the growing commitment of institutional investors to impact, and we are also seeing that, even in listed equity strategies, instead of having passive investments, institutions tend to go for active investments,” Wessemius-Chibrac said. 

However, the report stresses that investors still face barriers when pursuing impact in listed assets, especially in demonstrating investor additionality. 

Climate-related investments are the most favoured investment destination in terms of impact theme, far ahead of biodiversity, and social impact themes remain less used for impact investments. Healthcare has also become a more important target for Dutch impact investing since the COVID pandemic, while the market also has a growing focus on investment in the circular economy, 

In terms of regional destinations, developed markets continue to attract the lion’s share of impact investments, with  56% allocated to Europe, and 8% to North America. That contrasts with 13% of impact capital directed to Asia, 11% to Africa and 11% also directed towards Latin America and the Caribbean.

The NAB concludes the report with a series of recommendations, which it says need to be implemented if impact investments are to scale up faster.

It said that impact categorisations should be adopted that distinguish between impact-aligned and impact-generating investments, that more transparent reporting on outcomes and investor additionality are required, and that clear targets are needed, such as the NAB’s 10% allocation for impact and also its 4% sub-target for allocation in emerging markets. Finally, the NAB called for collaboration to expand investable options in underfunded SDGs.

A webinar held by the Dutch NAB to discuss the report’s findings can be viewed here.