Abstract

Impact Investing is a very promising phenomenon which is gaining always more popularity and importance, drawing the attention of both academics and practitioners. This practice was crucial in the recovery process after the 2008 financial crisis, and it has all the potential to be considered as a critical element to respond to the emergency situation generated by Covid-19 pandemic. However, since a lot of organisations and investors are now approaching the industry, this risks to incur the “impact washing” phenomenon. In order to avoid this threat, it is important to define the specific characteristics of impact investing, distinguishing it from other forms of sustainable finance, and this is the primary objective of this paper. Subsequently, this work describes in detail the impact investing ecosystem, composed of supply-side, demand- side, intermediaries and the enabling environment, in order to provide a complete view of the phenomenon. Finally, the main challenges of impact investing are identified, in order to direct the attention of research to them, enabling the phenomenon not to lose its transformative potential.