5 ways to make impact investing mainstream

What does it take to move an issue you care about from the margins of awareness to the mainstream of culture? Five years ago, when I joined the World Economic Forum, I was passionate about how social innovation and impact investing could solve world problems. Yet very few institutions knew about the practice. Unless impact investing was brought into the mainstream, it would remain either an unknown tool or a perpetual conference topic with no real impact.

Today, impact investing has been embraced by the mainstream. The Pope praises it as a meaningful poverty alleviation tool. Blackrock, the largest global asset manager, and Bain Capital, the largest private equity fund, are building offerings in impact investing. Most G8 countries are discussing enabling policies to scale it. And even Ivy League graduates and MBA students increasingly list “impact investing” over management consulting as their career choice.

At the Forum, we used five methods to bring impact investing from the margins to the mainstream. These lessons can also be helpful to other issues and sectors.

1. Find common ground

Understand the conflicting perspectives on an issue – and seek to reconcile those differences transparently and inclusively to add clarity, agreement and a path forward. Impact-investing early movers asserted financial-first investors were not impact investors. Traditional investors countered they needed to seek the best possible financial return or fail at their fiduciary obligation. The reality is impact investments are diverse in sector, geography, risk profile and expected return – much like traditional investments. Each impact investor is as unique in its approach as each artist is seeking to create beauty or each detective is seeking the truth. The differences that divide us are fewer than the similarities that can unite us.

2. Understand – and respect – other people’s perspectives

Recognize each person comes to an issue with assumptions of the way the world has and should work, and with presumptions as to how this new idea or topic should fit. When we began working with traditional investors, we first made them see we understood their worldview (without profitability, they can’t put food on the table for their employees’ families) and their constraints (i.e. pension funds were subject to government regulation). We were able to engage with them from a position of respect and understanding, rather than idealistic obligation.

3. Think “outside the box”

Find an innovative way to engage everyone in the work of problem-solving and solution-building that neither feels threatening to their current commitments and loyalties nor too light that it wastes their time. For example, we designed dynamic games as a way for skeptical individuals to test comfortably their own mental models of the way investment markets could work when factoring in social impact. In short – a direct experience is worth more than an elevator pitch.

4. Go big or go home

Once the issue becomes more popular, make it bigger than yourself, the early adopters and the vested interests. In January 2014, we launched a social media campaign from Davos that allowed individuals around the world to engage in the discussion and join the movement to mainstream impact investing. Often people want to join the cause but don’t know how. Give pathways to enter for everyone willing and able. Give licence to others to incorporate it into their own identity or institutional brand so that the cause is not owned by a few but embraced by many.

5. Get the foundations right

Build the scaffolding for responsible growth so that the risk of backlash, of hype or of implosion is limited. We did this by publishing reports that disseminated the best practices and lessons learned with candor, actionable tools, and depth of detail. Through public speaking, we surfaced legitimate concerns openly and deflated irrational criticism directly with both data and with compassion for the underlying reason of the concern. To ensure the success of a movement is to take responsibility for both its strengths and shortcomings, and to speak truth to power.

Above all else, remember that people and institutions, while interested in being part of something bigger and in creating a better future, are inherently self-interested. For a movement to be self-sustaining, it must work with self-interests, not against them. And for an issue to enter the mainstream, it must first seek to understand what has kept it at the margins and provide pathways for greater adoption.

Have you read?
How can we revive private investment?
How impact investing decisions should be made
How financial inclusion can end global poverty

Author: Abigail Noble, Associate Director, Head of Impact Investing, World Economic Forum

Image: A man walks at the Shiodome business district in Tokyo November 12, 2014. REUTERS/Thomas Peter