The Impact Investment Market: On the Road to Becoming Mainstream - Traits Defining a Market in Growth

Edith Marie Galster Pedersen & Emelie Marie Christine Waldnert

Student thesis: Master thesis

Abstract

Impact investing, defined as investing with the intent of creating both social and/or environmental (impact) and financial returns, is a relatively new form of sustainable investments for which its industry has yet to prove itself as approaching the size of the traditional investment industry. Actors in the impact investment industry express the goal to become mainstream, but uncertainty regarding the methods to achieve this pertains. So far, the research on the industry has mainly drawn from quantitative research, neglecting the qualitative as well as the sociological aspects on an industry that supposedly deals with a moral (impact) aspect of investments as well as a financial aspect. Drawing on a pragmatist approach, this paper applies a theoretical framework of how this new market is shaped in a reflexive society and how market traits are interconnected throughout the market. The data, collected through interviews and observations at impact investment events presents uncertainty in the market due to opaqueness in terms of communication, definitions, regulation, measurement tools, and the future. This leads to a discussion drawing on findings in correlation with the presented theory, where a number of traits that according to market actors are important for the market are discussed. These include 1) strong evidence of embeddedness of the market actors but weak evidence of embeddedness of society and regulation, 2) uncertainty in the market having an effect on market behavior, 3) actors calling for a change in the capitalist system, but not of it, 4) the existence of market plurality needing revision, 5) money’s value lying in its use as a tool and in its self-multiplicating effect, and 6) the threat of future risks encompassing all social layers, but impact investing is skewing the distribution of risk. Keywords: impact investing, market creation, valuation, value plurality, risk society, economic sociology

EducationsMSc in Business, Language and Culture - Business and Development Studies, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages123
SupervisorsMatthew Archer