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Impact Investments

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Mission Statement

The Project on Impact Investments is dedicated to studying the universe of impact investors and portfolio companies that seek to generate social benefits alongside financial returns as well as creating the infrastructure for others to expand knowledge on the impact investing sector.

Recent Research

What Do Impact Investors Do Differently?

By Shawn Cole, Leslie Jeng, Josh Lerner, Natalia Rigol, Benjamin Roth

The Project on Impact Investments’ Impact Investment Database

By Burton, M. Diane, Shawn Cole, Abhishek Dev, Christina Jarymowycz, Leslie Jeng, Josh Lerner, Fanele Mashwama, Yue (Cynthia) Xu, and T. Robert Zochowski

Studying the U.S.-Based Portfolio Companies of U.S. Impact Investors

By M. Diane Burton, Gurveen Chadha, Shawn A. Cole, Abhishek Dev, Christina Jarymowycz, Leslie Jeng, Laura Kelley, Josh Lerner, Jaime R. Diaz Palacios, Yue (Cynthia) Xu and T. Robert Zochowski

Why Impact Investing?

Impact investing has become a central, rapidly expanding part of the investment landscape in the United States and across the world. Impact investors are intentional in their efforts to generate both social and/or environmental goods alongside a range of returns, from principal to above-market. Therefore, impact investing is defined by both intention of generating social and/or environmental outcomes and measuring those outcomes.

Impact investing has grown significantly over the past 15 years. From a niche investing segment with approximately $25 billion AUM in 2013,[1] it has experienced double digit growth and developed into a market with an estimated $502 billion AUM by the end of 2018.[2] Alongside the surge in impact investing, there has also been an increase in related but distinct practices, including Environmental Social and Governance (ESG)-focused investing and green bonds. The UN launched its six Principles for Responsible Investment in 2006 in order to promote greater commitment to ESG issues amongst global investors, garnering 100 signatories. By the start of 2020, more than 3,000 organizations managing about $90 trillion had signed on.[3] Meanwhile, the year 2019 marked the highest recorded issuance of global green bonds and green loans, totaling $257.7 billion, an increase of 51% on the previous year.[4]

Despite recent interest around impact investing, many questions remain surrounding this practice and its effects. How are social benefits defined and measured? How are “true” impact investors differentiated from those that are just “impact washing” in order to improve their image? Can social benefits be achieved without sacrificing investment performance and, if so, what conditions allow for this to happen? If not, what return profiles are realistic? How are impact investments structured to maximize efficacy and how can the dual goals of building both financial and social value through investments most effectively be achieved?

The Project on Impact Investments is at the forefront of investigating these questions through critical, multi-method research. The project is further dedicated to building a foundation of rigorous data for the development of best practices in the impact investing space.

  1. WEF, “From the Margins to the Mainstream: Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors” (World Economic Forum, September 2013), http://www3.weforum.org/docs/WEF_II_FromMarginsMainstream_Report_2013.pdf.
  2. Abhilash Mudaliar and Hannah Dithrich, “Sizing the Impact Investing Market” (Global Impact Investing Network, April 2019), https://thegiin.org/assets/Sizing%20the%20Impact%20Investing%20Market_webfile.pdf.
  3. PRI. “PRI Update: Q2 2020.” Principles for Responsible Investment, April 2020. https://www.unpri.org/download?ac=10291.
  4. CBI, “2019 Green Bond Market Summary” (Climate Bonds Initiative, February 2020), https://www.climatebonds.net/files/reports/2019_annual_highlights-final.pdf.
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Campus Map
Project on Impact Investments
Harvard Business School
Boston, MA 02163
Phone: 1.617.998.1320
Email: impactinvestments@hbs.edu
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