Impact Investing, Systems Change and Education

The social and ecological transformations required to achieve the 2050 Vision for Biodiversity and the Sustainable Development Goals entail the development and use of new financial instruments. Impact investing/Impact finance has the objective of financing innovations, organizations and communities to bring about a measurable and positive change. Adopting a system perspective for impact investing is essential as these financial instruments aim to have a positive impact on social-ecological systems.

Yet, research is needed to understand how impact investing influences systems change. Considering the behavioural, organizational, temporal and spatial dynamics at stake in impact investing, there are several levels of analysis to be considered. I elaborate on the following two:

1. Impact investing requires investors to understand their behaviour and intervention in systems when designing and implementing investments. What are the decision processes employed by individuals when deciding to allocate capital to some investments? What are the tensions and justifications of different measurements for financial return and environmental impact? How do investors balance the values and different temporalities (short, medium, long term) attached to financial investments and social/ecological impacts (e.g. temporal perspective of investments often disconnected to the temporality of natural ecosystem restoration)? How do investors conceive their participation in systems for multi-level impacts (e.g. an impact at the local level can interact with social-ecological components at other levels)? What are the scaling strategies they use?

In other words, how does impact investing/finance influence social-ecological systems (and their transformation), and how does impact investing/finance influence the way investors think of their role within these systems?

2. Impact investing also requires the collaboration of several actors involved in the system, them being private actors, governments, non-profit organizations and communities. What are the tensions (e.g. linked to temporality, scale, values, return and impact) between stakeholders and how are conflicts and tensions between actors resolved? How is performance across the organizations evaluated, given that different actors might have different evaluative practices and principles?

Moreover, it is crucial to re-think the curriculum of business schools to emphasize environmental issues in the education of future and current business leaders. Conservation Finance/Impact Investing is a nascent space and there seems to be a dearth of educational opportunities (particularly around Executive Education and other practitioner-based trainings). There are many opportunities to bring together new structures, business models and technology to direct effective capital towards conservation outcomes (both social and environmental), but teachers and professors are only slowly building up their own work, case studies and knowledge in the space. Hence, it seems important to engage group of experts around what is needed in terms of education and training opportunities, what is already existing and where we, as university lecturers, could play a useful role in developing and deploying courses around Conservation Finance/Impact investing. We need to find ways to contribute to the coordination and collaboration of this emerging space.