The project is structured around three sub-projects that are tightly interlinked. All sub-projects are also tied to specific practical considerations for business and other stakeholders.
In this project, we collect a data set consisting of interviews among actors from the financial sector (e.g. venture capitalists, fund managers, banks and institutional investors), impact entrepreneurs, innovation intermediaries, government actors and other policy bodies, as well as corporations from traditional industries. We also conduct participatory observations at industry events, conferences and business development programs in the field, and collect industry reports, news articles and academic research articles on the topic. This will create a rich data set on the emerging impact investing market in the Nordics.
Research privacy notice in Aalto University Impact Investment Project
Changing norms and practices of valuation among management
The financial sector has well-established practices and tools for evaluating the performance and potential of companies. In addition to considering a company’s profit, impact investing measures social and environmental value. This new form of investing challenges traditional norms of valuation in the financial sector, providing a fruitful context to explore how novel valuation practices emerge in strongly institutionalized settings. The purpose of this sub-project is to focus on the processes by which managers adopt new assessment strategies and business goals that might be contradictory in nature.
“Hyped” market categories and the emergence of category boundaries
Impact investing as an emerging asset class relates to sustainable development challenges such as climate change and poverty alleviation. Overall, such societal trends create a ‘demand’ for social and environmental businesses. Sometimes “hypes” can emerge in new market categories. Studies have shown that in such settings companies may both substantially and symbolically exhibit certain values and features and adopt novel practices. The attachment of firms to hyped categories, such as impact investing, differs widely. In this sub-project, we study how boundaries are negotiated in impact investing, and the role of different communities in both expanding the meaning of the market category and protecting its boundaries.
Valuation and the future
How actors evaluate the future is central to investments; Practices of assessing value creation relates closely to how time is perceived and how the future is used in financial evaluation. Impact investing embodies expectations of both financial and social-environmental value creation in the future. To assess the potential for morally desirable futures impact investors are found to adopt frames that attribute worth in novel ways. In this sub-project, we highlight how impact investors are challenging temporal conventions in financial investments, and explore the relationship between future perceptions and valuation in impact investing
Targeted deliverables and outcomes
With our study, we aim to
– map out the impact investing ecosystem in the Nordics
– craft understanding on the current opportunities and challenges experienced by the ecosystem actors
– craft understanding on the social mechanisms by which the new market category emerges.
We will share our insights with the research participants.