Unlocking the Mind of Impact Investors: Insights from Canadian Decision-Makers
In a world where capital has the power to drive both profit and purpose, impact investing has emerged as a transformative force. But what truly motivates impact investors? How do they balance financial returns with social and environmental impact? And what can we learn from their decision-making processes?
A groundbreaking study by the University of Victoria, in collaboration with Impact United Academy and Spring, delves into the behavioural dynamics of Canadian impact investors. Through a combination of interviews and field experiments, the research uncovers fascinating insights into how these investors navigate the complex landscape of impact investing.
Key Insights from the Study
- Impact vs. Returns: A Delicate Balance
While many impact investors claim they are willing to accept lower financial returns for greater social or environmental impact, the reality is more nuanced. The study found that 36% of investors prioritized financial returns, while only 18% were impact-first investors. This highlights the ongoing tension between profit and purpose, even among those committed to creating positive change. - The Role of Gender and Experience
Interestingly, gender played a minimal role in decision-making, with both male and female investors showing similar priorities. However, experience mattered. Novice investors were more likely to prioritize financial returns, while experienced investors were more balanced, often aligning impact and financial goals. - Climate vs. Health: Different Motivations
The study revealed that climate-focused investors were more likely to prioritize impact, driven by the existential threat of climate change. In contrast, health investors often viewed financial returns and social impact as intrinsically linked, reflecting the strong market demand for health innovations. - The Power of Additionality
One of the most compelling findings was the concept of additionality—investors often chose to support ventures they perceived as “most in need of support.” This suggests that impact investors are not just chasing returns or impact metrics but are also motivated by the potential to make a meaningful difference where it matters most.
What Does This Mean for the Future of Impact Investing?
The study underscores the complexity of impact investing. While many investors are driven by values and a desire to create positive change, financial considerations remain a critical factor. The lack of standardized impact metrics and the challenges of due diligence further complicate decision-making, highlighting the need for better tools and frameworks to support investors.
As Keith Ippel, Co-CEO of Spring, aptly puts it:
“Impact investing isn’t just about allocating capital—it’s about aligning our resources with our values to create a world where every business is an impact business and every investor is an impact investor, that contributes to the sustainability, health, and equitable future. The journey is challenging, but the potential for transformative change is limitless.”
For those looking to dive deeper into these insights, the full case study offers a comprehensive analysis of investor behavior, decision-making processes, and the evolving landscape of impact investing in Canada.
Explore the full findings of this groundbreaking research? Download the complete case study to gain a deeper understanding of how Canadian impact investors are shaping the future of finance. Whether you’re an investor, founder, or simply passionate about sustainable innovation, this study offers valuable insights to inform your journey.
Let’s continue to push the boundaries of what’s possible in impact investing. Together, we can create a world where every investment drives both profit and purpose.
Source:
This article is based on the research study “Inside the Mind of Impact Investors: Behavioral Insights & Decision Dynamics” conducted by Dr. Basma Majerbi and Sam Treacy at the University of Victoria, in collaboration with Impact United Academy and Spring. The study draws on interviews and field experiments involving Canadian impact investors.