During Canada Climate Week, Sarona Asset Management and the Canada Forum for Impact Investment and Development (CAFIID) convened industry leaders who have shaped, and continue to shape, Canada’s impact investing landscape. The gathering marked a dual milestone: Sarona’s 15-year anniversary and the launch of CAFIID’s latest State of the Sector report, offering a fresh look at how Canadian capital is driving impact in emerging markets today.
A Look Back: From Niche to Established Industry
Panelists from Sarona, MEDA, FinDev Canada, Momentus Global, Fruuit Consulting, and Social Capital Partners opened the evening with personal stories about how they entered the impact investing space. Their reflections illustrated how far the sector has come—transitioning from a niche, values-driven practice to a recognized and expanding industry with sophisticated tools, diverse actors, and growing investor interest.
Where We Are Now: Collaboration and Blended Finance Lead the Way
A dominant theme of the conversation was collaboration. Today, much of the sector’s most effective cooperation is occurring through blended finance—structures that combine catalytic and commercial capital to unlock new markets, especially for social enterprises and first-time fund managers.
“Impact investing has always been about partnership. No single fund, government, or investor can move the needle alone—but together, we absolutely can. I am proud of how Sarona has used government capital from Canada and Australia to reduce risk and bring other investors into impact investing in emerging markets.”
Panelists emphasized that blended finance remains one of the most powerful tools for accelerating private-sector investment. However, several speakers noted that many development finance institutions (DFIs) are still too risk-averse—and that greater catalytic leadership is needed.
Africa emerged as a clear example of inefficiency: capital often “round-trips” through jurisdictions like Delaware before reaching local enterprises.
“Our job is to fix the inefficiencies that block capital. If we can simplify structures and make them predictable, private investors will come in much faster.”
Who Gets Funded—and Who Still Doesn’t
Another central theme was inclusion. Panelists highlighted the urgent need to support first-time and women fund managers—leaders who understand their markets deeply and can deploy capital more effectively into underserved communities.
“This is not a technical challenge anymore. It is a leadership challenge. The tools are proven. The question is whether institutions will choose to use them.”
Transparency as a Competitive Advantage
Companies often fear that disclosing ESG risks may deter investors. Panelists argued the opposite: transparency builds trust, attracts capital and improves investment terms.
“Companies often think being open about ESG risks will scare investors away. In reality, transparency attracts more capital and often lowers the cost of financing.”
Speakers encouraged investors to move beyond passive monitoring toward active engagement—supporting portfolio companies in building stronger climate, labour and governance practices.
Momentum Is Building—But Gaps Remain
While challenges around financial performance, inconsistent metrics, and slow institutional adoption persist, there is clear evidence of progress. According to CAFIID’s new State of the Sector report:
- Since 2019, Canadian impact investing in emerging markets has more than doubled to $4.6 billion, growing at 13% per year.
- FinDev Canada is projecting portfolio growth to $4.8 billion by 2029.
“Public capital can open the door, but scaling impact requires private investors to walk through it. Our role is to make that pathway clear and investable.”
Yet Canada still trails its European peers in mobilizing large institutional capital for global sustainable development.
“Mobilizing even 1% of Canada’s total assets under management would unlock more than $200 billion for sustainable development in emerging markets.”
Moving Forward: A Call to Action
The message across all discussions was clear: the impact investing sector has the partnerships, the evidence, and the momentum. What it needs now is leadership.
Investors, advisors, policymakers, and institutions all have a role in making impact a core part of investment practice—moving away from pilot projects toward fully integrated, long-term strategies.
Resources
- CAFIID – State of the Sector Report
- David G. Frazer – “Can Active Engagement Bolster Investment Performance?”
- Sarona Asset Management – Values Report
