Impact Risk Management in Impact Investing: How Impact Investing Organizations Adopt Control Mechanisms to Manage Their Impact Risk
Date
Authors
Supervisor
Item type
Journal Article
Degree name
Journal Title
Journal ISSN
Volume Title
Publisher
American Accounting Association
Abstract
In impact investing, impact risk encompasses the probability that investment projects may fail to achieve the expected positive impact (i.e., positive impact risk) and/or may have a negative impact (i.e., negative impact risk). Using an inductive research approach, this study examines how impact investing organizations adopt control mechanisms to manage impact risk. It finds that impact investors adopt a wide range of input, behavior, and output control mechanisms to manage impact risk that may arise from investee-level, investor-level, and system-level operations. Also, to manage impact risk, investors establish control mechanisms to influence relevant actors not only within a firm’s boundary but also outside its boundary. Given the inherent complexity and ambiguity in managing impact risk in impact investing, control mechanisms appear to rely heavily on judgment and experience and adhere more to the “satisficing” principle. Furthermore, investors tend to focus more on managing positive impact risk than negative impact risk.Description
Source
Journal of Management Accounting Research 2022; doi: https://doi.org/10.2308/JMAR-2021-041
Rights statement
© 1998 - 2022 by American Accounting Association. Authors can archive a copy of their article in their institution’s database. Many institutions, domestic and international, are now requiring their scholars to archive their work in their institution’s repository. This is not a permission issue, per se, because they do not intend to publish or distribute the work. If the repository is fully open access, those librarians are usually aware of publisher requirements regarding how to properly archive the article (full citation with DOI link), and in some cases, there may be embargoes (period of time in which the work cannot be posted).