Impact investing is growing in both Canada and Australia, yet capital often remains domestic and fragmented. A recent CAFIID webinar brought together organisations from the two countries to examine whether closer collaboration could help.
The conversation was practical. Speakers focused on what is already working, where progress has stalled, and how joint efforts might unlock more capital at home and across neighbouring regions. The session featured speakers from Sarona Asset Management, Australian Impact Investments, Dalberg Advisors and Rally Assets.
What we heard
Australia’s potential sits in its superannuation system
Australia holds the fourth-largest pension system in the world, and the scale of that capital shapes everything that follows. A handful of large funds have begun to make dedicated impact allocations. These commitments remain small, but they signal a shift.
Over the past decade, governments at both federal and state levels have driven the market through social impact bonds, development investment funds, and the creation of vehicles such as the Emerging Markets Impact Investment Fund which has now become the Australian Development Investment trust (EMIIF / ADI).
The challenge is not lack of interest from investors. It is scale. Large institutions invest only when opportunities reach a size that fits their machinery. Philanthropy and family offices can test ideas, but the supply of investable vehicles remains thin. More products need to reach the size that super funds require.
“Australia has the capital and the policy foundations for impact, but the market will not scale until more investable vehicles reach the size that super funds require.”
Canada shows the effect of structured public–private design
Canada has taken a more centralised path. The federal government created a CAD 755 million Social Finance Fund and selected national wholesalers to seed managers and crowd in private capital. This has sped up market building. Equity considerations are written into mandates, directing capital towards women-led managers, diverse founders and regions that have historically seen little investment, such as the Atlantic provinces, First Nations communities, and Northern Canada.
More capital is now flowing to Indigenous-led fund managers and enterprises as part of a broader effort to integrate reconciliation into investment practice. Canada’s approach shows how design and public finance can reshape who participates in the market and who receives capital.
Measurement works when it stays light
Both markets see impact measurement as essential, though they approach it differently. Australia has built a culture of verification and shared methods, which strengthens credibility but can limit smaller managers. Canada is moving in the same direction but tends to favour flexibility and equity.
Participants agreed that simple tools travel best. A small set of comparable indicators, paired with short outcome narratives, can show real progress without overwhelming organisations. Light assurance helps when investors move across borders. The aim is not perfect data but information that guides decisions.
“Standards matter when they help money move. The goal is not perfect measurement but a shared language that makes cross-border investing possible.”
Mobilising private capital requires a portfolio mindset
Canadian firms have found that investors are more comfortable when impact is framed at the portfolio level rather than deal by deal. Some positions offer strong financial returns with moderate impact. Others generate deep social value with different risk and liquidity profiles. Together, they can meet overall targets.
Blended finance can also shift investors behaviour. First-loss and risk-sharing structures have eased the J-curve for Canadian investors and encouraged support for newer funds. These mechanisms matter only when they change decisions, not when they sit unused.
“Impact does not demand a trade-off. The right portfolio structure and the right blend of public and private capital can deliver both returns and equity.”
Platforms can link two distant markets
Shared standards help investors speak the same language. Gender-lens frameworks such as the 2X Criteria and blended-finance toolkits offer a base for alignment. Australia’s measurement culture and Canada’s experience with catalytic capital complement each other. The practical opportunity lies in shared due diligence, co-investment and regular exchanges of lessons.
What emerged
Domestic capital tends to stay at home
Investors in both Canada and Australia display a strong preference for domestic assets. Exposure to emerging markets remains limited even when those markets align with climate, gender or development goals. This gap between interest and deployment is a shared constraint. Closing it will require clear structures, trusted intermediaries and early risk from public or philanthropic actors.
Investors need vehicles that match their scale
Institutional investors in both countries back opportunities only when they are large and predictable. Domestic themes such as climate transition and housing remain the easiest fit. For international opportunities, early money from government or foundations can help funds reach first close and make them suitable for larger investors.
Blended finance must be easy to use
Participants stressed that blended finance should be straightforward. First-loss capital, guarantees and similar tools need clear terms and simple templates. Investors also want practical evidence of when these mechanisms have shifted decisions. This keeps the focus on what works.
Key takeaway
Canada and Australia cannot scale impact investing by acting alone. Joint structures, impact measurement and targeted risk-sharing will be needed to move capital at scale. Testing these tools together is now the logical next step.
