Impact Investing

Could impact investing be a catalyst for change and provide a bridge from profit maximisation towards positive corporate purpose? How might the financial community, in partnership with governments, regulators and entrepreneurs, contribute to the responses to the enormous challenges we face globally? Focusing on impact investing this chapter describes the features of this type of investing and how it has rapidly grown and considers its relevance for corporate purpose, sustainability and social benefit as part of a ‘Spectrum of Capital’. The chapter first seeks to provide some clarity around the meaning of impact investing and then locates impact investing along a ‘Spectrum of Capital’ with focus on the intentions of the investors and the types of projects they fund. Then the chapter looks at how the policy and regulatory framework that supports impact investing is evolving. There are certain features that may provide incentives for impact investing but, despite its appeal, there also some ‘blockers’ and challenges that could limit the potential contribution. The chapter concludes with some predictions and suggestions for the future of impact investing.