Impact Investing for Institutional Investors

As a group, institutional investors are among the largest and most influential actors in the investing community. It is, therefore, significant that a growing number of institutional investors are beginning to embrace the practice of impact investing.

Impact investments are designed to generate social and environmental benefits alongside financial returns. Since impact investing is still a relatively new industry, the academic literature as well as the metrics and tools used to assess impact are still nascent. This is not, however, due to lack of activity. Impact investing frameworks, measurements, and metrics are multiplying quickly through the work of academics and practitioners alike.

Institutional investors are among the most recent entrants into the impact sector, which was initially defined by foundations and family offices. Due to their scale and fiduciary obligations, the decision-making process for institutional actors is distinct from that of other investors. This paper, authored by Bretton Woods II fellow Rachel F. Wang, is designed to serve as a guide for institutional investors interested in impact investing by compiling a toolkit of impact investing resources that align with the investment process.