The Impact Investing Boom On Business School Campuses

impact investing


Danielle Reed was already an impact investor when she stepped onto the campus of the University of California-Berkeley Haas School of Business in 2013 — though her family didn’t know it. They thought she worked at a nonprofit or something. But Reed actually worked for San Francisco-based boutique impact investing firm Imprint Capital, which was gobbled up by Goldman Sachs in 2015. “Now they can read about impact investing in The Wall Street Journal and The New York Times. They know what it is,” the 32-year-old San Francisco native says. Indeed, in the past few years the idea of garnering both financial and social returns on investment has moved from the fringe to the mainstream — while also moving toward the mainstream of elite business school curriculum.

At the same time Reed was beginning her business training in Northern California, a new course on impact investing was created at Pennsylvania’s Wharton School, bringing the concept to a Wharton classroom for the first time. Three years later, Jacob Gray, director of the Wharton Social Impact Initiative, says the course’s enrollment tops the school’s traditional investing course. “It’s become extremely popular as a class,” Gray tells We See Genius. Starting this fall, Harvard Business School will launch its first iteration of a course dubbed Creating Shared Value and Impact Investing. HBS offered its first impact investing-focused course in 2011, joining the likes of Columbia Business School, which has been offering similar courses for more than a decade. Duke’s Fuqua School of Business is doing the same. The list goes on.

It may seem as if do-gooder investors are taking over elite B-schools. But ask any top-shelf finance prof and he or she will pump their chests telling you how this is nothing new and they’ve been doing some form of impact investment instruction since the 1950s, when sustainable, responsible, and impact investing (SRI) was first conceived. Everyone wants to be first. In the ’60s and ’70s, amid the country’s political and social upheaval, environmental, social, and governance (ESG) investing arose to the fore. Not until recently, however, have significant curricular and extra-curricular resources in MBA programs been pumped into the phenomenon that many are still trying to properly define. As human rights issues continue to arise in the 21st century, the timing of it all certainly makes sense.


“There’s been a whole groundswell of mind expansion and the tools one can use to make change," says Cathy Clark. Courtesy photo

“There’s been a whole groundswell of mind expansion and the tools one can use to make change,” Cathy Clark says. Courtesy photo

“Those of us who have been in this world for the past 20 years have had a lot of conversations over those 20 years with only us in the room. And now it’s everyone,” says Cathy Clark, adjunct professor at Duke’s Fuqua School and the director of Fuqua’s CASE i3 Initiative on Impact Investing. Over the past five years, Clark says, significant interest from venture capitalists, investment banks, and even pension funds have led to an influx of new, diverse voices in the room — creating “a welcome conversation. And that makes a difference to the purview of an MBA and this as a career track.”

Between talent development and research, she says, academia has played and will continue to play a major role in the development of the fledgling field. “What changed about five years ago is that we realized the field was catching up and the term ‘impact investing’ had emerged,” says Clark, who has spent 25 years in the field and who taught her first impact investing-related course at Columbia Business School in 2001. “There’s been a whole groundswell of mind expansion and the tools one can use to make change.”

Four years after Clark came to Duke’s Fuqua School in 2007, she created CASE i3 based on her observation of growing interest among Fuqua MBAs. “I thought it would take five or six years to build a robust program,” Clark says. “And I was completely wrong.” Within three years, she says, “significant numbers” of incoming MBA classes indicated through school surveys that they chose Fuqua because of its leadership in the field. Now between 10% and 30% of each class applies to be part of CASE i3. “We are seeing more mainstream finance students trying this out,” notes Clark, adding that the 18 impact investing-related credits offered by the school serve alongside traditional finance courses. “It’s not cannibalizing finance, it’s a layer we want to teach them on top of finance,” she points out. Every year, she says, about 70 to 80 students take Fuqua’s mainstay impact investing course.

  • C. Taylor

    It will be an anomaly for one not to measure on three dimensions instead
    of just two. Instead of risk and return, it will be risk, return, and

    This is silly rebranding. Risk and return have
    always had an intangible and or long term aspect and stakeholders have
    been in the consideration set for some time as well. To suggest the only
    aspect of risk and return without directed impact on the bottom line in
    the near term which matters is ‘impact’ limits the scope of
    consideration as much as proponents incorrectly suggest risk and return

    Good to highlight multiple aspects of risk and return. Bad to suggest those aspects are not actually subcomponents of the two.

    When people like Bill Gates and even Warren Buffet talk about how
    capitalism has created the externalities that are causing so many
    problems — wealth and income inequality, environmental degradation — you
    have to question the system

    Inequality is inherent to
    rising productivity in the long term. There would be a huge problem if
    it did NOT exist. 110% of 100 is 110. 110% of 10 is 11. 110% of 110 is
    121. 110% of 11 is 12.1. The gap widens even though increasing at the
    same rate. Perfectly healthy.

    As wealth hits a global scale,
    increases in excess of market returns become increasingly scarce. So
    rather than focusing on the top end, those interested should focus on
    the bottom end–perhaps seeking to lower the financial hurdle–and
    risks–separating the masses from access to market leading returns.

    easiest way to do this is perhaps to lower the barriers to starting
    businesses on a small scale. At the moment, regulation and law still
    create barriers. IP laws favor first to file over first to invent.
    Archaic segmentation still exists (video and music rights, right to sell
    alcohol). Licensing requirements are onerous. Lodging regulations,
    banking regulations; the list is long. Tiering requirements and
    harmonization across local borders is common sense. Developing a
    nurturing ecosystem of like-minded entrepreneurs and experts would help
    (Bloomberg’s Roosevelt Island tech hub, is a good example). Eliminating
    corporate tax would be great.

    What does matter on the macro level
    is 1) how to deal with stagnant incomes while productivity
    increases–an entirely separate issue, and 2) whether the lot of the
    many improves faster over the long run in present circumstances than it
    would under alternatives (the answer with capitalism is ‘yes’, under
    socialism, ‘no’).

  • bwanamia