Impact Investing Innovation—From Impact 1.0 to 3.0

Wulf Kaal ()
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Wulf Kaal: School of Law, University of St. Thomas, St Paul, MN 55105, USA

Sustainability, 2024, vol. 16, issue 24, 1-29

Abstract: Impact innovation has progressed through three phases: 1.0, 2.0, and 3.0. Impact 1.0 introduced carbon credit trading, while Impact 2.0 added participatory grantmaking, impact measurement, and price competitions. Impact 3.0 incorporates Web3 community tools and impact certificate trading. This paper examines the evolution of these phases, focusing on Impact 3.0’s influence on philanthropic practices. Through an analysis of the literature and case studies, Web3 technologies and impact certificate markets are investigated for how these innovations affect transparency and efficiency in social impact initiatives. The information gathered indicates that Impact 3.0 facilitates decentralized impact verification and creates a marketplace aligning stakeholder interests. Consequently, leveraging the features of Web3 technologies can enable philanthropy to scale significantly and provide insights for impact-focused donors aiming to improve outcomes.

Keywords: social impact; ESG; impact certificates; carbon credits; decentralized autonomous organization; finance; token models; cryptocurrencies; feedback effects; emerging technology; tokens; blockchain; distributed ledger technology (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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