Preserving the Integrity of Social Impact Investing: Towards a Distinctive Implementation Strategy

Irene Bengo, Alice Borrello and Veronica Chiodo
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Irene Bengo: Department of Management, Economics and Industrial Engineering, Politecnico di Milano, 20133 Milano, Italy
Alice Borrello: Department of Management, Economics and Industrial Engineering, Politecnico di Milano, 20133 Milano, Italy
Veronica Chiodo: Department of Management, Economics and Industrial Engineering, Politecnico di Milano, 20133 Milano, Italy

Sustainability, 2021, vol. 13, issue 5, 1-19

Abstract: Social impact investing (SII) is a strategy of asset allocation that aims to generate social and environmental impact alongside a financial return. Compared to other approaches of sustainable finance it holds an enormous potential of generating solutions to societal challenges. However, scholars have claimed that social impact often just employs logic upheld by the mainstream investment approach. Therefore, the paper investigates the assumption that SII has not developed a distinctive implementation strategy able to translate the prioritization of social impact into practice and how to overcome this issue. The thematic analysis of data collected through 105 interviews with Italian SII financiers and the top managers of social ventures allowed us to identify three features of an SII tailored practice: promoting a cultural shift of intermediaries, adopting a coopetition approach, and integrating the social impact in the terms of the financial transaction. Lastly, the paper drafts a research agenda to enhance the proper theorization of SII focusing on the definition of social risk, social return, and governance mechanisms. The key contribution of this article is confirming the lack of an SII-specific practice able to endogenize the intent of prioritizing social impact and providing suggestions to prevent the risk of impact washing.

Keywords: social impact investing; social venture; coopetition; impact washing; social impact measurement; social risk (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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