Impact at Work: An Examination of Corporate Impact Investing Strategies and Their Durability
Summary
The U.S. Impact Investing Alliance published Impact at Work: An Examination of Corporate Impact Investing Strategies and Their Durability.
The goal of this report is to examine corporate impact investing, or the leveraging of a corporate’s balance sheet or investment capital to advance positive social, economic and environmental outcomes alongside financial considerations. Impact at Work provides an overview of the current state of corporate impact investing, with a focus on the best practices and opportunities for companies to develop durable strategies that advance positive outcomes for stakeholders in line with their business’ priorities.
Support for this report was provided by the Robert Wood Johnson Foundation The views expressed here do not necessarily reflect the views of the Robert Wood Johnson Foundation.
Key Takeaways
The report highlights several recommendations and best practices for corporates seeking to build durable impact investing strategies:
Build champions early. Committed corporate leadership and board support are critical to the launch and continuation of a successful impact investing strategy.
Leverage existing structures. Strategies that build on existing business lines, priorities and practices can lead to more seamless alignment, buy-in and longevity across corporate teams.
Prioritize investment expertise. Effective strategies require the right teams with the appropriate investment expertise to source, diligence and manage investments.
Tie impact to strategy and/or financial return. Durability is most apparent with impact investment strategies that generate strong financial returns and/or clearly align with strategic value for the business.
Develop an accountability strategy. Transparency, authenticity and ultimately, accountability, can drive durability and credibility. Corporates should consider how they will track and disclose their progress to stakeholders when building strategies.
Perspectives from the Field
“Recent social and environmental crises have catalyzed a widespread rethinking of the ideal role of major institutions in supporting the public good,” said Fran Seegull, President of the U.S. Impact Investing Alliance. “For corporations in particular, this rethinking has manifested in bold commitments to invest in racial equity, community development and climate initiatives. These investments are increasingly leveraging impact investing tools over traditional grantmaking tools, but more transparency, accountability and sharing of best practices is still needed.”
“The magnitude of challenges we face means we need all hands on deck, and it is encouraging to see a broader group of institutions mobilize their capital for impact,” said Kimberlee Cornett, Director of Impact Investments at the Robert Wood Johnson Foundation. “It’s our job as impact investors to share best practices and push for accountability to ensure companies and others entering this space are leveraging successful, durable strategies to drive real impact on the ground.”
“Companies are increasingly exploring ways to maximize the positive impact of their investments on society, their stakeholders and the planet,” said Amit Bouri, CEO and Co-Founder of the Global Impact Investing Network (GIIN). "By partnering with impact investors and employing industry best practices, companies will unlock more ways to put their own assets to work and deliver stronger impact throughout their business."
“Americans expect companies to serve their stakeholders, particularly their workers, and they expect these efforts to be authentic and lasting. The good news is that research shows that companies who prioritize stakeholders also outperform their peers in the market,” said Alison Omens, Chief Strategy Officer of JUST Capital. “This report highlights the opportunities for corporations to be transparent, invest in their stakeholders and catalyze a race to the top.”
The U.S. Impact Investing Alliance would like to extend a special thank you to the impact investing and corporate leaders who offered expert insights during the research phase. We would also like to thank the Robert Wood Johnson Foundation for supporting this work, as well as Miljana Vujosevic and Jennifer Kim who lent their expertise as consultants on this project.
We hope that Impact at Work will spur a broader discussion around the growing opportunity to catalyze a more holistic, long-term corporate impact investing movement.