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This chapter sketches a new development in responsible investing, namely impact investing. Impact investing, which we define as the entire spectrum of investments deliberately aiming to create shared value, can be seen as an integrative approach to wealth creation through investments. The case of microfinance is used to illustrate this new development.

The chapter combines a viewpoint and a case study that serves to illustrate the practical relevance of the viewpoint.

The chapter starts with a brief overview of the origin and rise of responsible investments, followed by a description of mission-related investments and impact investing as its latest development. Microfinance is presented as a special case, thereby focusing on the investors, the asset allocation and the meaning – and application – of the notion of impact.

The chapter shows that a focus on social and financial returns can be combined without having to make serious financial sacrifices. It also demonstrates that investments can come from investors as diverse as pension funds, foundations or high net-worth individuals.

If impact investing really takes off – particularly supported by institutional money – there will be much more opportunity to tackle social and environmental innovation than without those investments.

The chapter challenges (institutional) investors to evaluate their responsible investment strategy and to rethink their asset allocation. Impact investing can become an important addition to the responsible investment landscape.

Field emergence poses an intriguing problem for institutional theorists. New issue fields often arise at the intersection of different sectors, amidst extant structures of meanings and actors. Such nascent fields are fragmented and lack clear guides for action; making it unclear how they ever coalesce. The authors propose that provisional social structures provide actors with macrosocial presuppositions that shape ongoing field-configuration; bootstrapping the field. The authors explore this empirically in the context of social impact investing in the UK, 2000–2013, a period in which this field moved from clear fragmentation to relative alignment. The authors combine different computational text analysis methods, and data from an extensive field-level study, to uncover meaningful patterns of interaction and structuration. Our results show that across various periods, different types of actors were linked together in discourse through “actor–meaning couplets.” These emergent couplings of actors and meanings provided actors with social cues, or macrofoundations, which guided their local activities. The authors thus theorize a recursive, co-constitutive process: as punctuated moments of interaction generate provisional structures of actor–meaning couplets, which then cue actors as they navigate and constitute the emerging field. Our model re-energizes the core tenets of new structuralism and contributes to current debates about institutional emergence and change.

Institutional complexity shapes what is perceived as possible by framing cultural debates about practices, but organizations in turn shape how logics interpenetrate fields, suggesting that we must consider both the degree of compatibility between logics and the degree of practice variation in a field. Our exploratory study of three entrepreneurial impact finance organizations considers how they situate their practices between the market and community logics. We offer a recursive view that considers how multiple institutional logics shape practices and how entrepreneurial organizations adapt and invent new practices that, through their continued use, can influence the institutional complexity of a field.

The anti-apartheid movement represented a cornerstone for socially responsible investors in the 1970s and 1980s driven by the willingness to promote lasting social change. What happened next in terms of socially responsible investing (SRI) in the free South Africa? This chapter explores the local development of SRI in South Africa post-apartheid.

An in-depth literature review combined with a content analysis 73 SRI funds’ investment mandates were undertaken to investigate the local development of SRI in South Africa over the period 1992–2012.

Mechanisms of local divergence and global convergence have both shaped the phenomenon of SRI in South Africa. SRI in South Africa represents a melting-pot of societal values anchored in a local developmental and transformative political vision, some local and global Islamic religious values, and worldwide SRI and CSR homogenisation trends.

This chapter is the first attempt to outline the mechanisms of local divergence and global convergence that have moulded SRI in a democratic South Africa.

One decade since its birth, the impact investing market has grown exponentially to several hundred billion dollars. Although promising, this figure is dwarfed by the major financing gap that still remains if we are to meet the world's sustainable development needs. In order to scale and capture the hundreds of trillions of private capital available for social good, it will be crucial to address the biggest question in impact investing today: who is willing to take on risk? Specifically, who is willing to take on the risk of innovation; the risk of valuing women and the underserved in financial markets and the risk of giving a voice to the voiceless? This chapter examines a novel ecosystem approach, developed over the past decade by Impact Investment Exchange (IIX) to address risk and find solutions to it at multiple levels of the social capital markets value chain. By incorporating the voices of underserved beneficiaries in impact assessments; providing impact enterprises with technical assistance, investment readiness and capital raising support and using innovative financial mechanisms to catalyse greater change, IIX has unlocked millions of dollars of investment capital while improving the risk–return–impact profile of investments. To lead impact investing in the long term, those in the sector must similarly learn to embrace and address risk through creative, practical and inclusive approaches that give voice and value to society's most vulnerable.

The objective of this chapter is twofold. It first introduces the theme of the book. There are many ways of looking at socially responsible investment (SRI). It can be viewed as a financial product where the financial performance is the outmost important aspect and cannot be compromised. Or it can be regarded as a force for change to promote and stimulate a more sustainable development. In this chapter we provide a literature review on SRI especially on the notion of the impact and how it has been addressed so far in the literature. The second objective of the chapter is to provide an overview of the volume by introducing each chapter.

This chapter reviews the literature on SRI as well as the chapters included in this volume.

If SRI is about making a change toward sustainability, we ought to study its societal and environmental impacts. Although scholar articles on SRI have gained importance in the two last decades, very little is known on its impact. Research has developed from a narrow concern with negative screening and divestment in isolated cases to a rigorous analysis of its financial performance across a range of ethical and ESG issues. While we have identified some studies that are beginning to explore the potential impact of SRI for society, this remains a crucial area to explore.

The chapter contributes to the debates on the societal impact of SRI, a debate that needs to be continued even if or just because it raises some fundamental questions that are complex and difficult but also necessary to advance SRI.

In a moment where social issues around the world are becoming more and more severe, a call for real impact is very much needed. Current investment into societal solutions that work at scale is not sufficient to get us closer to achieving the Sustainable Development Goals. Additional capital is required, but it is also essential that it is deployed in ways in which impact is maximised. Focussing on additionality – not just intentionality – and on impact management – not just impact measurement – represents the right direction.

EVPA embarked in a journey towards redefining the impact investment space to clarify the role of different investors. EVPA identifies two main strategies: investing for impact and investing with impact. Investors for impact are those that support innovative ways to tackle societal problems and embrace impact management, using the data collected to refine activities to maximise social impact.

However, despite all the frameworks and guidelines produced in the field of impact measurement and management in the last 10 years, the perception among the community of investors for impact is that there is still a lot to do, highlighting a gap between theory and practice. Investors' networks such as EVPA play a crucial role in filling this gap, supporting members (but not only) in the adoption of appropriate IMM practices. In this respect, EVPA has developed several responses (e.g., five-step IMM process, a training partnership with Social Value International, in-depth case studies) and is fully committed to strengthen its efforts in the years to come.

Hybrid organizations face particular challenges and opportunities due to combining different logics within one organizational structure. While research on hybrid organizing has advanced considerably our understanding of how these organizations can cope with such tensions, institutional theory suggests that organizational legitimacy and success will also depend on processes that take place at the field level. We connect these two perspectives to examine how field hybridity influences organizational legitimacy. Specifically, we consider both a field’s maturity and its degree of hybridity as two important variables that determine the effects that field hybridity has on organizational legitimacy. Drawing from extant research and leveraging our empirical work in the fields of microfinance, social entrepreneurship and impact investing to provide illustrative examples, we propose a framework that considers both positive and negative effects of field hybridity on organizational legitimacy. We contribute to the literature on hybrid organizing in two ways. First, we show that hybrid organizations face different challenges and opportunities depending on the stage of development and degree of hybridity of the field they operate in. Second, we suggest that the effects of field hybridity on organizational legitimacy can be understood as trade-offs that organizations need to understand and approach strategically to leverage opportunities and mitigate challenges.