Giving Compass' Take:
- Here are five characteristics of corporate impact investing, a field that can drive progress toward a more sustainable and equitable future.
- How should donors approach corporate impact investing to capitalize on the best opportunities for social good?
- Learn more about impact investing here.
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Over the last 12 months, several companies have launched investment strategies to advance social-and-environmental causes alongside strategic and business goals. Much of this activity took place in early-stage innovation— venture investments with the potential to steer industries toward a more sustainable and equitable future—and has been led by a growing archetype of investor: the corporate impact investor.
Corporate impact investors make investments that are aligned with and amplified by their company’s strategic priorities, market position, and resources, in order to generate measurable, mutually reinforcing social and financial returns. Corporate impact investors use a blend of traditional tools, including corporate venture capital, corporate social responsibility, and corporate development, to intertwine business and societal goals through the investment process—until the success of one affirms and furthers the success of the other.
In other words, the investments target not only financial return and strategic value to a company, but also demonstrable positive social and environmental outcomes. While the relative priorities may change based on the entity, stage, team, and business alignment, most corporate impact investors operate under the premise that intentionality across all three pillars can yield reinforcing social and financial returns.
While corporate impact investing is still a nascent field, with more validation points and definition likely to come in the years ahead, similarities among effective practices have begun to emerge. Based on market research and insights from our own investing practices, we share five characteristics of effective corporate impact funds that we hope will provide inspiration not only for what’s happening today, but also for what’s possible in the future.
- Governance and Executive Buy-In
- Thesis Development
- Impact Management
Read the full article about corporate impact investing by Ryan Macpherson, Claudine Emeott, Ken Gustavsen, and Moses Choi at Stanford Social Innovation Review.