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Impact finance: how social and environmental questions are addressed in times of financialized capitalism

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  • Eve Chiapello

    (Centre d’Etude des Mouvements Sociaux (EHESS/CNRS-UMR 8044-INSERM U1276))

Abstract

This article discusses the growth and different guises of impact finance. Impact investing, social impact bonds, blended finance, and venture philanthropy all share the aim of directing private money in search of a financial return towards “impactful” projects or businesses. The association between the concept of social (or environmental) impact and finance was forged in public debate after the 2008 financial crisis, and has enabled the development of a whole ecosystem of actors (evaluators, consultants, asset managers, dedicated associations and forums, training programs, etc.) promising a new kind of finance, capable of producing both financial and social returns. I argue that despite the growth of this ecosystem, its proposals are unable to meet social and environmental needs and are in fact reinforcing neoliberal financialized capitalism. First, they confer legitimacy on financial actors by giving the impression that with appropriate incentives, such actors are capable of responding to social and environmental issues with no need for major institutional changes. Second, they contribute to the capture by financial actors of public money earmarked for those issues. The two cases of social impact bonds and impact investing are discussed to illustrate these phenomena and the futility of these practices.

Suggested Citation

  • Eve Chiapello, 2023. "Impact finance: how social and environmental questions are addressed in times of financialized capitalism," Review of Evolutionary Political Economy, Springer, vol. 4(2), pages 199-220, July.
    • Handle: RePEc:spr:revepe:v:4:y:2023:i:2:d:10.1007_s43253-023-00104-y
    DOI: 10.1007/s43253-023-00104-y
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    References listed on IDEAS

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    1. Cooper, Christine & Graham, Cameron & Himick, Darlene, 2016. "Social impact bonds: The securitization of the homeless," Accounting, Organizations and Society, Elsevier, vol. 55(C), pages 63-82.
    2. Daniela Gabor, 2021. "The Wall Street Consensus," Development and Change, International Institute of Social Studies, vol. 52(3), pages 429-459, May.
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    Cited by:

    1. Andreas Dimmelmeier, 2024. "Expanding the politics of measurement in sustainable finance: Reconceptualizing environmental, social and governance information as infrastructure," Environment and Planning C, , vol. 42(5), pages 761-781, August.
    2. Golka, Philipp, 2023. "Impact investing and the politics of leverage: towards a meso-level perspective on derisking," SocArXiv 9uvzw, Center for Open Science.
    3. Golka, Philipp, 2023. "Impact investing and the politics of leverage: towards a meso-level perspective on derisking," SocArXiv 9uvzw_v1, Center for Open Science.

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