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Purpose-washing of impact investing funds: motivations, occurrence and prevention

Suzanne Findlay (Centre for Social Impact, Swinburne University of Technology, Hawthorn, Victoria, Australia)
Michael Moran (Centre for Social Impact, Swinburne University of Technology, Hawthorn, Victoria, Australia)

Social Responsibility Journal

ISSN: 1747-1117

Article publication date: 21 November 2018

Issue publication date: 27 September 2019




As an emerging field of financing, impact investing is under-institutionalised and is in a legitimacy building phase. In an attempt to unpack how impact investing is deployed in global markets, the key elements of its definition (intentionality, returns and measurement) are examined through a review of academic and practitioner literature. A refined definition is developed which emphasises the key elements of intentionality and measurement as separating impact investment from the established field of socially responsible investment (SRI).


Funds and products from a publicly available database are systematically analysed against the refined definition to determine the rigour with which intentionality and measurement are applied by self-identified market participants. These elements are used as a proxy to determine “purpose-washing” – a process where funds are presented as impact investments but do not satisfy a tightly applied definition. Purpose-washing enables the possibility of “retrofitting”, where funds originally defined as other products (e.g. SRI) retrospectively claim to be impact investments.


Having found evidence of purpose-washing but not retrofitting, actions are identified to enhance impact investment’s integrity, focussing on intentionality, measurement and transparency. Clarity of definition and purpose are important for a field in the market-building phase, as a lack of clarity could have negative implications for integrity and growth. The authors postulate that purpose-washing may be attributed to twin but distinctive motivations by market participants: interest in fee-generation among fund managers and attempts to bolster field legitimacy by demonstrating sector growth among impact investing proponents.

Originality value

This paper represents a unique analysis of impact investments against a robust and refined definition. By doing so, it offers a systematic appraisal of impact investments and an overall assessment of market integrity in its field-building phase.



Findlay, S. and Moran, M. (2019), "Purpose-washing of impact investing funds: motivations, occurrence and prevention", Social Responsibility Journal, Vol. 15 No. 7, pp. 853-873.



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Copyright © 2018, Emerald Publishing Limited

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