Epsilon Archive for Student Projects

Abstract

Impact investing has become more recognized in recent years as businesses, communities and governments try to find new solutions to tackle environmental and social concerns. The term involves creating environmental and/or social benefits while generating financial returns, and thereby producing a positive impact for the society with investments. Impact investing can be an important tool for directing more funding towards achieving the Sustainable Development Goals (SDGs). However, there is currently limited information about the field of impact investing and there is a lack of in-dept knowledge about evaluation criteria used in this area. This limited ability to capture and value non-financial performance presents a significant challenge for impact investors. This study examines how Swedish impact investors evaluate and measure the impact of their investments. By using a qualitative method based on semi-structured interviews, a multiple case study was conducted with six Swedish impact investors to provide an understanding of their impact assessment processes and their perceived challenges and opportunities with the impact investing landscape. The study concludes that there is no standardized and widespread approach to assess impact among the investors. The field is in a developing phase, and the investors are experimenting to find solutions that fit their organizations. All investors had a thorough screening process. Other components of impact assessment include measuring CO2 equivalent and adopting definitions or frameworks from industry organizations. Some of the main challenges that the investors face are greenwashing and impact washing, comparability of measurements and the lack of harmonization of frameworks.