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Impact Investing: Killing Two Birds with One Stone?

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  • Cornelia Caseau
  • Gilles Grolleau

Abstract

A cornerstone of impact investing is the intentional provision of measurable nonfinancial returns in addition to conventional financial returns. This attractive promise also constitutes the Achilles’ heel of impact investing. When two or more goals (e.g., impact and financial returns) are pursued through a single means (e.g., investing), humans tend to believe that the means becomes less effective in achieving either goal. We discuss the conceptual foundations of this likely bias and its implications for the impact investing movement. We also suggest some practical ways to overcome this issue.Disclosure: The authors declare that there is no conflict of interest. Editor’s Note This article was externally reviewed using our double-blind peer-review process. When the article was accepted for publication, the authors thanked the reviewers in their acknowledgments. Rajna Gibson Brandon and one anonymous reviewer were the reviewers for this article.Submitted 30 January 2020Accepted 2 June 2020 by Stephen J. Brown

Suggested Citation

  • Cornelia Caseau & Gilles Grolleau, 2020. "Impact Investing: Killing Two Birds with One Stone?," Financial Analysts Journal, Taylor & Francis Journals, vol. 76(4), pages 40-52, October.
    • Handle: RePEc:taf:ufajxx:v:76:y:2020:i:4:p:40-52
    DOI: 10.1080/0015198X.2020.1779561
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    Cited by:

    1. Biasin, Massimo & Cerqueti, Roy & Giacomini, Emanuela & Marinelli, Nicoletta & Quaranta, Anna Grazia & Riccetti, Luca, 2022. "Clusters of social impact firms: A complex network approach," Global Finance Journal, Elsevier, vol. 52(C).
    2. Marszk, Adam & Lechman, Ewa, 2024. "What drives sustainable investing? Adoption determinants of sustainable investing exchange-traded funds in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 63-82.
    3. Benjamin S. Thompson, 2023. "Impact investing in biodiversity conservation with bonds: An analysis of financial and environmental risk," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 353-368, January.
    4. Anna Gervasoni & Francesco Bollazzi & Margherita Mietto, 2022. "Private equity for the development of smart cities: the Italian case," LIUC Papers in Economics 2022-14, Cattaneo University (LIUC).
    5. Bachmann, Kremena & Meyer, Julia & Krauss, Annette, 2024. "Investment motives and performance expectations of impact investors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 42(C).
    6. Angelique Brathwaite & Nicolas Pascal & Eric Clua, 2022. "Private Capital to Improve Nature-Based Solutions for Coastal Protection: Time for a Boost," Post-Print hal-03839140, HAL.
    7. Hilton, Joshua, 2025. "An integrated analysis of greenhush," Innovation and Green Development, Elsevier, vol. 4(2).
    8. Satish Kumar & Dipasha Sharma & Sandeep Rao & Weng Marc Lim & Sachin Kumar Mangla, 2025. "Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research," Annals of Operations Research, Springer, vol. 345(2), pages 1061-1104, February.
    9. Alice Falchi & Gilles Grolleau & Naoufel Mzoughi, 2022. "Why companies might under‐communicate their efforts for sustainable development and what can be done?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 1938-1946, July.
    10. Migliavacca, Milena & Patel, Ritesh & Paltrinieri, Andrea & Goodell, John W., 2022. "Mapping impact investing: A bibliometric analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).

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