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Is impact investing hitting its target?
- February 1, 2025: Vol. 12, Number 2

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Is impact investing hitting its target?

by Lauren Kaufmann and Helet Botha

Investors can aim not only to make money but to benefit society while doing so. But few of those impact investors follow up on whether their strategy is having a positive impact, we found in a study published in the Journal of Business Ethics.

After conducting 124 interviews with impact investors and an experiment with 435 participants, we found that, rather than evaluate impact risk directly, many impact investors presume that they will succeed at having a positive effect on the world when they assess their investment options.

In other words, they assume that certain businesses, such as solar energy companies or microfinance initiatives, are inherently good for society. This “win-win” mindset leads investors to focus primarily on financial performance rather than on evaluating whether their investments are achieving social or environmental impacts. Often, this means investors can’t determine whether specific investments perform better than others on soc

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