Emerging Spaces: Impact Investing

Abstract

Impact investing is a newly emerging practice that represents the idea that one can invest with a financial return and at the same time achieve a social impact. Impact investing has been gaining importance and growing in volume in the last few years, but research has not kept pace with the growing interest of practitioners. Therefore, this paper, in the context of the emergence of impact investing and the initial stages of development of the field in the Croatian context, aims to facilitate better understanding of the field through several aspects. The paper presents the trends that may have led to the emergence of impact investing and an overview of the path to its emergence. It also offers definitions of impact investment. In addition, the paper provides an overview of impact investing characteristics through different aspects such as impact-seeking purchasers, impact-driven organisations, different existing forms of financing, channels and sources of capital, and impact measurement. An additional aspect of the paper is a review of the current state and potential of impact investing as a field under development in the Croatian context. The paper tries to assess the potential of such a way of investing in the wider social sphere and the future development of practice, but also the directions of impact investing research.