Australia’s impact-investment market has surged to about A$157 billion by June 2025, according to a new report by Impact Investing Australia and the UNSW Centre for Social Impact.

This figure represents a remarkable jump from approximately A$20 billion five years ago and includes roughly A$137 billion directed toward environmental activities.

Institutions deployed about A$25 billion in the first half of 2025 alone, on track to exceed the near-A$40 billion record set in 2024, even as parts of the global finance industry pull back on climate-aligned projects in response to policy shifts such as those led by Donald Trump.

The expanding pool of capital spans green-energy and infrastructure funds, specialist “impact” investment vehicles, and issuance of green, social and sustainability bonds.

Dedicated impact investment funds managing less than A$3 billion in 2020 now oversee more than A$12 billion.

Green bond issuance has risen to almost A$145 billion by value, up from about A$17 billion in 2020.

Institutional commitments illustrate the trend: for example, the Australian Retirement Trust pledged nearly A$1 billion to a green‐energy fund in September 2025 and targets another A$1 billion of impact investment by 2030. Mainstream funds such as Australian Ethical — which now manages about A$14 billion — are directing capital into public electric-vehicle charging infrastructure, solar and battery projects and other climate-aligned assets.

Alongside capital flows, measurable outcomes are being reported: over the last five years, funds say they have supported the abatement of roughly 110 million tonnes of carbon dioxide equivalent emissions, avoided 1.3 million tonnes of landfill, planted 3 million trees and recycled or returned about 363 million litres of water.

Nevertheless, challenges remain.

The report highlights the absence of standard, consistent impact measurement frameworks as a key barrier to further growth.

Some fund-managers say they are hesitant to invest until definitions and verification processes become more robust.

Meanwhile, regulators have taken action: for instance, the national corporate regulator has pursued superannuation funds over alleged misleading claims about sustainable or impact-labelled investments.

According to fund-industry participants, the Australian market’s resilience in the face of international scepticism illustrates growing investor confidence in the dual promise of financial return and positive impact.

As one industry executive put it, where viable entrepreneurs are addressing environmental or social challenges and achieving profit, “there will be funds looking to deploy it”.

The report signals that Australia’s impact-investment ecosystem has matured significantly and is now playing a central role in the country’s low-carbon and sustainable-economy transition.

The question ahead is whether momentum can be sustained and expanded into the tens of billions of dollars still required to meet national and global climate-goals.