As the global impact investing market surpasses $1 trillion USD, a small yet growing number of companies are adopting the strategy.
Corporate impact investors are motivated by the limitations of traditional philanthropy to fundamentally alter the structural disadvantages of capital markets, the desire to diversify their social impact strategies, the proven possibility of competitive financial returns, and intensifying pressure on the private sector to help finance the UN Sustainable Development Goals (SDGs).
Regardless of their motivation, what these enterprising companies are discovering is a world of opportunity and constraint, one that requires intentionality and conviction when designing an impact investing approach that best serves the organization and its goals.
To support the aspirations of would-be and nascent corporate impact investors, NationSwell went behind the curtain with four successful and well-established leaders in the space. We dug deep into their investment philosophies, models, and mechanics with the intent to pinpoint the most fundamental design choices that determine a program’s shape and direction.
This report summarizes our learnings from these four investors, organized around a short but load-bearing list of questions that any new corporate impact investor will need to resolve with clarity. Each question is followed by further explanation of its significance, illustrations of how the four model organizations answered it for their own purposes, and additional guidance from NationSwell on how to approach the choices at hand.
The seven fundamental design choices:
- What is your impact investment thesis and how does it align with company priorities?
- Where do your investments originate within the enterprise?
- Are you investing directly in companies or indirectly through funds and intermediaries?
- How are you reaching beyond traditional networks to source investment leads?
- Who should be at the table when making investment decisions in order to optimize for efficacy and efficiency?
- What will be your level of involvement with investments after cutting a check?
- How will you measure and report the impact made through your investments?
