The Rise of Impact: Five Steps towards an Inclusive and Sustainable Economy

UK National Advisory Board, 2017: Click here to read the report.

For Business Leaders and Entrepreneurs:

The relationship between business and society is changing. Customers, employees and investors are increasingly demanding that companies do more to positively contribute to society and the environment.

Through their spending and employment decisions, they are showing their preference for businesses that have adopted a societal purpose beyond short-term profit maximisation. This shift in expectations and behaviour represents an enormous opportunity for businesses. As companies of all sectors and sizes have begun to reorient their business models towards meeting this new set of demands, they are finding that doing good can be good business: purposeful companies are often better able to attract and retain talented employees and committed investors, to differentiate themselves to customers, to attract investment at a lower cost of capital and, in many cases, to increase their share price performance. And, by incorporating purpose as a fundamental element of their strategy – either through what they do (their core business) and/or how they do it (their operations) – they are beginning to truly move the dial in helping tackle societal challenges. Beyond a question of public image, this approach will increasingly become a competitive imperative as society comes to redefine purpose as a core component of a business’s license to trade.

For Financial Institutions:

The investment landscape is shifting. Asset owners from high net worth individuals through to everyday savers are increasingly concerned about the impact their investments have on the world in which they live, and these concerns are beginning to be reflected across the investment chain. This comes at a time when the imperative to move towards a more inclusive and sustainable system of economic growth is greater than ever, and financial institutions have a critical role to play. In addition, achieving sustainable, long-term outperformance in a world awash with capital is more challenging than ever. Investors can no longer afford to ignore the growing body of evidence that impact is a positive driver of longterm returns; they should be incorporating it into their standard risk/return calculations, using a range of strategies from responsible investing (which seeks only to avoid harm) through to impact investing. The largest institutional investors around the world are beginning to commit substantial capital and resources into sustainable and impact investing strategies.


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