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Impact Investing: When Social Benefits Are in the Contract
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Impact Investing: When Social Benefits Are in the Contract

Knowledge at Wharton·Knowledge at Wharton Staff·about 1 month ago
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For impact investors, there are two bottom lines, says Wharton finance professor David Musto: making money, and making the world a better place. Katherine Klein, management professor and vice dean for the Wharton Social Impact Initiative , interviewed Musto about his latest research in the field. His forthcoming paper, “ Contracts with Benefits: The Implementation of Impact Investing, ” co-authored by Wharton adjunct finance professor Christopher Geczy,  Jessica Jeffers of the University of Chicago and Anne Tucker of Georgia State University, examines how social impact can be written into contracts when investors are looking to balance profits with social benefits. An edited transcript of the conversation follows. Katherine Klein: What is impact investing? David Musto: Impact investing is a term that has gained a lot of currency recently. The term itself doesn’t go back that far. It’s usually sourced to about 2007, but it was referring to a practice that had grown significantly to that point.…

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