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Between impact and returns: Private investors and the sustainable development goals

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  • Falko Paetzold
  • Timo Busch
  • Sebastian Utz
  • Anne Kellers

Abstract

We investigate the expectations of wealthy private investors regarding the impact and financial return of sustainable investments. Our paper focuses on the sustainable development goals (SDGs) as a framework for investors' attempts to create impact. We analyze the behavior of 60 high‐net‐worth individuals (HNWIs), a powerful yet overlooked investor segment. Our results show large allocations in line with the SDGs, which demonstrates these investors' aim of achieving real‐word changes. Furthermore, we show that these “impact investors” have a clear preference for SDGs that are associated with high financial returns. As such, we confirm that both impact and attractive financial returns are expected. Our findings provide rich, deep insights into how HNWIs practice impact investing and their underlying motivations. We outline practical implications for different stakeholders, notably regarding the fact that financially attractive SDGs are likely to attract substantial amounts of capital, with other SDGs remaining underfunded.

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  • Falko Paetzold & Timo Busch & Sebastian Utz & Anne Kellers, 2022. "Between impact and returns: Private investors and the sustainable development goals," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3182-3197, November.
    • Handle: RePEc:bla:bstrat:v:31:y:2022:i:7:p:3182-3197
    DOI: 10.1002/bse.3070
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    Cited by:

    1. Kara Nel & Nadia Mans-Kemp & Pierre D. Erasmus, 2023. "Sustainable Thematic Investing: Identifying Opportunities Based on an Analysis of Stewardship Reports," Sustainability, MDPI, vol. 15(10), pages 1-20, May.
    2. S. Sinan Erzurumlu & Stephen Deets & David Nersessian & Vikki L. Rodgers, 2023. "Strategic engagement of business with Sustainable Development Goals: A systems thinking approach," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4954-4969, November.
    3. Shome, Samik & Hassan, M. Kabir & Verma, Sushma & Panigrahi, Tushar Ranjan, 2023. "Impact investment for sustainable development: A bibliometric analysis," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 770-800.

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