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When two or more goals (impact and financial returns) are pursued through a single means (investing), we may think we’re less effective in achieving either. We discuss this bias and implications for the impact investing movement.


Overview

A cornerstone of impact investing is the intentional provision of measurable nonfinancial returns in addition to conventional financial returns. This attractive promise also constitutes the Achilles’ heel of impact investing. When two or more goals (e.g., impact and financial returns) are pursued through a single means (e.g., investing), humans tend to believe that the means becomes less effective in achieving either goal. We discuss the conceptual foundations of this likely bias and its implications for the impact investing movement. We also suggest some practical ways to overcome this issue.

About the Author(s)

Cornelia Caseau

Cornelia Caseau is an associate professor and researcher at CEREN EA 7477, Burgundy School of Business, Université Bourgogne Franche-Comté, Dijon, France.

Gilles Grolleau

Gilles Grolleau is a professor at CEREN EA 7477, Burgundy School of Business, Université Bourgogne Franche-Comté, Dijon, France, and Université de Montpellier SupAgro, Montpellier, France.