Mainstream asset owners are on a journey to make their investments a powerful force for good — let’s welcome them.
In the impact investing community, there is continuing talk about whether “the big tent” — created by the diversity of strategies and approaches pursued by investors– is too big.
There are continuing calls for tighter definitions of what qualifies as an impact investment, and greater clarity on how the various segments of the impact investing community — from big pensions to small, early-stage funds — fit together. These are important issues, springing from our community’s shared desire to safeguard the integrity of impact investing so it can reach its great potential.
While these discussions are very important, I believe they are best held with an eye toward building an even bigger tent than the one we have today. As field-building leaders, we encourage debate about issues like these that have the potential to delay or derail effective and sustainable social and environmental progress. Concerns about “mainstreaming” are real, and we share these concerns. We also acknowledge the very exciting opportunities such mainstreaming offers.
The field at large shares this mixed reaction. Data from the recently published 2017 GIIN Annual Impact Investor Survey address the entry into impact investing of large-scale asset owners and other financial firms, with respondents expressing both positive expectations as well as concerns.
On the positive side, a majority felt that this trend would help professionalize the market, bring much-needed capital into the market, and enhance the credibility of impact investing. On the cautionary side, more than two-thirds of respondents believed that this trend was associated with a risk of mission drift or “impact dilution.”