Позитивные изменения. Том 2, №4 (2022). Positive changes. Volume 2, Issue 4 (2022)

https://goo.su/9XuSk

Impact Investing: What Problems are Researchers Concerned About? Publications Digest

The field of impact investing is the point of convergence between a wide range of academic disciplines, and as the market for social entrepreneurship and reflection on measuring social impact develops, the problems taking place within these processes are being categorized actively. What the researchers in the impact investment market are focusing on is the topic of our digest of publications of the second half of 2022.

Elizaveta Zakharova

PhD student, Department of Social Sciences, National Research University Higher School of Economics

One of the most notable topics addressed in recent publications is the focus on business ethics and the attempt to address ethical issues arising with the growth of impact investing. The authors emphasize the need to ensure that social exchange practices meet ethical standards and to assess the integration of such practices into the social entrepreneurs' projects. In addition, issues related to addressing systemic inequalities are being mainstreamed: works are appearing on how to establish inclusive participation in decision-making for the direct beneficiaries of social investment. The authors of some publications bring to the forefront a conversation about the balance between the risks and contribution to addressing the social problems. They are noting an accelerated financialization of the market (i.e., the growth of financial sector expansion) and the growing role of philanthropy in reducing the risks of impact investing. The article about how fintech solutions can come handy in planning and evaluating impact investment is of particular interest in our selection. In its latest report, GIIN estimates the market for impact investing at $1.164 trillion and outlines two areas for future development: green bonds and corporate investing. Finally, there remains a tendency among researchers to attempt to systematize the accumulated scientific base around the topic of impact investing in order to highlight the most influential research directions and trends and outline the circle for new ones.

1. BLENDED SOCIAL IMPACT INVESTMENT TRANSACTIONS: WHY ARE THEY SO COMPLEX?

Michael Moran, Libby Ward-Christie

Article, 4 June 2022, Journal of Business Ethics

Blended social impact investment (SII) transactions, in which multiple types of capital are combined to support attainment of social impact, are a pervasive, yet not closely examined, feature of the SII market. This paper seeks to describe and understand blended SII transactions through the lens of institutional theory. Specifically, we use the institutional logics theoretical frame to shed light on the implications of combining several institutional logics in SII transactions. Consistent with other SII research, we find that parties to blended SII transactions combine financial /commercial and social welfare logics. However, in blended SII transactions, different combinations of these logics are enacted by different stakeholders in a multi-hybrid-logic structure. As such, we propose that blended SII transactions are hybrids-of-hybrids. We argue that it is this hybrids-of-hybrid characteristic that differentiates blended SII transactions from other forms of SII and increases the potential for significant logical misalignment and resultant conflict and contestation. From a business ethics perspective, blended SII transactions cast light on the critical and often unrecognized role that grants and concessionary capital frequently play in enabling SII in not-for-profit charitable ventures. We speculate that this can distort understanding of SII with adverse implications at the transaction and field levels.

https://clck.ru/32ucUi

2. ETHICAL SENSEMAKING IN IMPACT INVESTING: REASONS AND MOTIVES IN THE CHINESE RENEWABLE ENERGY SECTOR

Tongyu Meng, J. Newth, C. Woods

Article, 15 June 2022, Journal of Business Ethics

This article explores impact investing within the renewable energy sector. Drawing on ethical decision making and sensemaking, this article contributes to an enhanced understanding of the complex ethical sensemaking process of impact investors when facing plausible situations in a world of contested truths. Addressing the ethical tensions faced by impact investors with mixed motives, this study investigates the way decision makers use context-specific reasons to make sense of and shape the renewable energy investment (REI) process. This represents an initial attempt to understand ethical sensemaking in impact investing made within the renewable energy (RE) sector using a multi-stakeholder approach. Our findings show that prosocial, personal, reputational, and economic motives are the main drivers of REI, with prosocial and personal motives being value-based, and reputational and economic motives being evidence-based. We find three different modes of ethical sensemaking (pragmatic, retrospective, and forecasting), allowing for the construction of the four motives noted above. These motives are based on the context-specific reasons of impact investing decision makers in the RE sector. This article contributes to the academic discourse on ethical sensemaking with some key processes involved in ethical decision making, and a better understanding of the underlying motivations of impact investing in the RE sector.

https://goo.su/AlQAGFf

3. DOES IMPACT INVESTING HELP VC FUNDS TO ATTRACT STARTUPS? EXPERIMENTAL EVIDENCE

Ye Zhang

Research paper, 12 October 2022, SSRN Electronic Journal

Although firms' preferences about impact investing affect sustainable investment in equilibrium, little relevant empirical evidence exists to guide the theory. This paper studies whether adopting an impact investing strategy influences startups' intentions to collaborate with venture capitalists through two complementary field experiments that involve real US startup founders and real-world stakes. The first experiment requires entrepreneurs to evaluate multiple randomly generated investor profiles so that they can receive a recommendation list containing real matched investors' information. The second experiment is a novel payment game, which elicits entrepreneurs' taste-driven preferences. Provided with real monetary incentives, entrepreneurs decide whether to pay for a more comprehensive investor recommendation list which contains randomized number of impact investors and is sold at a randomized price. I find the following main results: (i) Environmental initiatives causally reduce venture capitalists' attractiveness to startups while social initiatives improve investors' attractiveness. These preferences are correlated with entrepreneurs' beliefs of the investor's ability, availability, and informativeness. (ii) Sorting occurs in an asymmetric way. Impact ventures prefer approaching impact investors with social initiatives while profit-driven ventures avoid approaching impact investors with environmental initiatives. (iii) Significant heterogeneous effects exist based on entrepreneurs' and investors' backgrounds. Male investors benefit from aiming for social impact while female investors lose aiming for environmental impact. Compared to Democratic entrepreneurs, Republican entrepreneurs are more opposed to impact investors. (iv) Entrepreneurs have taste-driven preferences towards impact investors.

https://goo.su/l3kZpzV

4. UNDERSTANDING IMPACT INVESTMENT INTENTION USING THE EXTENDED THEORY OF PLANNED BEHAVIOUR

Prerna Rathee, S. Aggarwal

Article, 27 August 2022, Global Business Review

Impact investing is ‘blended value proposition' that generates a mix of financial, social and environmental values for the investor, organization and businesses. This study aims to explore the factors influencing the Indian investors' intention towards impact investing (II) using the theory of planned behaviour (TPB), extended with two constructs, that is, risk perception and internal motivation, to predict such a phenomenon in the Indian context. The data has been collected from 338 Indian investors who primarily engage in impact investing. The collected data have been analysed using two-step structural equation modelling. The findings of this study indicate a positive and significant impact of attitude, subjective norms and perceived behavioural control on investors' intention towards impact investing in India. Risk perception has been showed the least positive influence on the investors' intention whereas internal motivation has a highly positive influence on investors' intention to invest for impact.

This is the first attempt to measure investors' intentions towards impact investing from the Indian perspective using the TPB model with the extended constructs, that is, risk perception and internal motivation, which is the novelty of this study. This study will help policymakers to take important regulatory measures to build an effective ecosystem for impact investing in India.

https://clck.ru/32ud6L

5. ACCOUNTING INFRASTRUCTURES AND THE NEGOTIATION OF SOCIAL AND ECONOMIC RETURNS UNDER FINANCIALIZATION: THE CASE OF IMPACT INVESTING

A. Guter-Sandu

Article, 2022, Competition & Change

Impact investing has emerged as a topical subject-matter for scholars working at the intersection between finance and social policy. By and large, it is seen as a product of financialization: some argue that the social is colonized by financial actors and methods, others see it as a site where boundary work produces a state of value plurality in which competing values – social and financial – co-exist. This article takes the latter perspective further and unpacks the endogenous dynamics underpinning the creation of social values in impact investing programs. It analyzes how high-level organizations in the field prescribed specific social impact valuation processes and mechanisms for collecting, measuring, and reporting data about value creation. It argues that the social values circulating in the impact investing field emerge from the interplay between a wide array of stakeholders, impact investors included. The social impact accounting tools that capture them materialize therefore as sites of political battles and negotiations between stakeholders, with both emancipatory but also exploitative potential. This has consequences upon our understanding of how financialization travels and how the social dynamics underpinning accounting devices (re)draw boundaries between competing values and fields.

https://goo.su/fh26

6. INVESTING IN A SOCIAL VENTURE TO GENERATE SOCIAL IMPACT OR FINANCIAL RETURN

B. Urban, Odifentse Mapula-e Lehasa

Article, 11 November 2022, Business Perspectives and Research

Recognizing that the current literature provides a fragmented depiction of impact investor decisions, this article empirically examines if impact investors are focused on financial returns or instead on the social impact generated by social enterprises. To address this research objective a sample of impact investors are surveyed in South Africa, where there is an increasing demand for impact investors to fund initiatives that address the country's many underlying structural deficits and wicked problems. Findings, based on correlational and regression analyses, indicate that variation in the impact investment decision is explained by the financial return motive. This finding resonates with the argument that investors are primarily focused on financial competitiveness and return on their investment. Developing a strong body of evidence that validates the effectiveness of policy in supporting impact investing is pivotal, particularly when given the lack of sustainability of many social enterprises in African and emerging economies.

https://goo.su/deoz9

7. THE ENTREPRENEURIAL PERSPECTIVE IN IMPACT INVESTING RESEARCH: A RESEARCH AGENDA

Christin Eckerle, Sarah Manthey, O. Terzidis

Published 7 September 2022, European Conference on Innovation and Entrepreneurship

The Covid-19 pandemic, climate crises, and regulatory changes are only a few reasons for the growing public alertness regarding environmental and social problems. This has caused a shift in the mindset of companies and investors in terms of sustainability and the long-term impact of innovation. Thus, sustainable investments, particularly impact investments, have continued to grow in importance and momentum to shift the focus on rebuilding the economy more sustainable and future-oriented. The current state of research in this field indicates that most academic contributions are mainly about theoretical considerations and deal with various areas. There is no aggregated state of the art in academia with a focus point on impact investment for entrepreneurship. Yet, entrepreneurs are seen as key actors to drive sustainable innovation. Compared to the current growing impact investment practices and the necessity of a strategy to get financing, the topic is still relatively unexplored scientifically. In this research, a systematic literature review is conducted to further review, evaluate, and analyze the current research agenda on impact investment and show how it relates to entrepreneurship research. In particular, impact investment-related decision criteria, as well as challenges associated with this, will be presented. This contributes to the nascent literature on impact investing by documenting how impact investors stand in relation to entrepreneurial ventures and what measurement frameworks and models are already scientifically analyzed, which has practical implications for both impact investors and entrepreneurs.

https://clck.ru/32udYa

8. GIVING AS “DE-RISKING”: PHILANTHROPY, IMPACT INVESTMENT AND THE PANDEMIC RESPONSE

Jessica Sklair, P. Gilbert

Article, 2022, Public Anthropologist

This article examines the role played by philanthrocapitalist foundations in impact investing for international development, focusing on the covid-19 Vaccines Global Access Initiative (covax) as a response to the current pandemic. Philanthrocapitalists and development institutions are increasingly turning to “blended finance” and “social bonds” to address the gaps in funding required to meet global development agendas, particularly in the arena of global health. These impact investing mechanisms deploy public or philanthropic money to leverage for-profit investment in development, by “de-risking” (providing guarantees for) interventions that might otherwise put private capital at risk. Via covax, the Bill and Melinda Gates Foundation has platformed a pandemic response centred on this approach, resisting alternative responses – such as the proposal for a temporary waiver to pharmaceutical patent rights – that seek to challenge the prevailing trade architecture. The global policy response to covid-19 thus accelerates the “financialization” of development and cements the role of philanthropy in “de-risking” for-profit impact investment.

https://goo.su/rIuiyB

9. FRAMEWORK FOR ASSESSING THE INTEGRATION OF ETHICS IN THE DESIGN OF IMPACT INVESTMENT VENTURES

A. Dedeke

Article, Summer 2022, Business and Professional Ethics Journal