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Impact investing has evolved from a niche ethical practice into a powerful financial strategy aimed at achieving measurable social and environmental outcomes alongside financial returns. This chapter traces its historical development, beginning with early ethical investment principles rooted in religious traditions, progressing through the rise of Socially Responsible Investing (SRI) in the mid-twentieth century, and culminating in the integration of Environmental, Social, and Governance (ESG) criteria and the formalisation of impact investing in the early twenty-first century. The chapter highlights key milestones, including the establishment of the Sullivan Principles, the creation of the Global Impact Investing Network (GIIN), and the rise of shareholder activism as a tool for corporate accountability. Furthermore, it examines the critiques of SRI and impact investing, such as Milton Friedman's argument against corporate social responsibility and concerns over potential inefficiencies in socially motivated investments. The chapter also explores the significant role of global crises—including the 2008 financial crisis, the COVID-19 pandemic, and climate change—in accelerating the mainstream adoption of impact investing. Regulatory developments, such as the Sustainable Finance Disclosure Regulation (SFDR) and the UN-backed Principles for Responsible Investment (PRI), have further institutionalised ESG and impact investing principles. As impact investing grows, this chapter underscores the need for standardised impact measurement frameworks and increased capital flows into high-risk regions. The convergence of impact investing with the UN Sustainable Development Goals (SDGs) highlights its potential as a transformative financial model capable of addressing global challenges such as poverty, inequality, and climate change. Ultimately, impact investing represents a paradigm shift in financial markets, positioning capital as a driver of inclusive and sustainable development rather than a purely profit-driven mechanism.

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Introduction

  • 章节

  • 发表日期：

    2025年

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  • Nse Udohaya

摘要

Impact investing has evolved from a niche ethical practice into a powerful financial strategy aimed at achieving measurable social and environmental outcomes alongside financial returns. This chapter traces its historical development, beginning with early ethical investment principles rooted in religious traditions, progressing through the rise of Socially Responsible Investing (SRI) in the mid-twentieth century, and culminating in the integration of Environmental, Social, and Governance (ESG) criteria and the formalisation of impact investing in the early twenty-first century. The chapter highlights key milestones, including the establishment of the Sullivan Principles, the creation of the Global Impact Investing Network (GIIN), and the rise of shareholder activism as a tool for corporate accountability. Furthermore, it examines the critiques of SRI and impact investing, such as Milton Friedman's argument against corporate social responsibility and concerns over potential inefficiencies in socially motivated investments. The chapter also explores the significant role of global crises—including the 2008 financial crisis, the COVID-19 pandemic, and climate change—in accelerating the mainstream adoption of impact investing. Regulatory developments, such as the Sustainable Finance Disclosure Regulation (SFDR) and the UN-backed Principles for Responsible Investment (PRI), have further institutionalised ESG and impact investing principles. As impact investing grows, this chapter underscores the need for standardised impact measurement frameworks and increased capital flows into high-risk regions. The convergence of impact investing with the UN Sustainable Development Goals (SDGs) highlights its potential as a transformative financial model capable of addressing global challenges such as poverty, inequality, and climate change. Ultimately, impact investing represents a paradigm shift in financial markets, positioning capital as a driver of inclusive and sustainable development rather than a purely profit-driven mechanism.