Over the past decade, impact investing has began to gain its foothold in China. Several research reports explored impact investing in the Chinese context including Yifang Foundation's 2013 Social Enterprise and Social Investment Research Report, UBS's 2013 report on the China Social Enterprise and Social Impact Investment Development Report, and Narada Foundation's 2019 Research Report on the Social Enterprise and Social Investment Industry.

Many domestic institutional investors are starting to engage with impact investing, including Grass Capital, Mana Impact Fund, and BitsxBites. There is a strong demand for impact investing stimulated by requirements on government's finance distribution and performance management, concerns of market investors for sustainability related risks, and the expectation of the new generation to express personal values towards social responsibility in consumption and investments.   

Nevertheless, after years of development, multiple challenges still stand before impact investing. The first challenge is derived from a lack of consciousness from mainstream business investors. The market tends to have a small investment scale with a focus on early-stage private equity. Impact investing also receives insufficient attention. Also, along with a lack of consensus, the practice norms of impact investing have not yet been established. Domestic investors also lack communication with international impact investors and are unclear on the direction of development.

This report aims to provide analysis regarding the domestic market to provide a better understanding about the industry's existing challenges, including the dilemma of setting agendas. Therefore, China Alliance of Social Value Investment supported the research on impact investing and published the report Impact Investing for Sustainable Development: Emerging Consensus, Global Ecosystem and Strategies in China. This report is expected to provide ideas and inspirations for different parties in China to start material impact investments and find innovative strategies suitable for the Chinese market.