By Christine Driscoll Goulay, Associate Director, and Hans Wahl, Director, INSEAD Social Entrepreneurship Programme (ISEP)

Key Insights

• Conducting a stakeholder analysis of students, alumni, scholars and outside practitioners working in the impact investing field can help universities both understand the unmet needs and design their programmes well.
• Channelling enthusiasm, exploration and excitement into concrete projects and initiatives gives stakeholders the opportunity to collaborate for mutual benefit.
• It is important to recognize and incorporate an array of engagement opportunities, including convening thought leaders, creating feedback loops between research and the curriculum and alumni practitioners and the curriculum, and promoting cross-sector partnerships that build the knowledge and practice.

Introduction to Impact Investing at INSEAD

Impact investing has become of increasing interest to INSEAD over the past several years as many within the INSEAD community view it as an opportunity to combine their business skills with a desire to make a positive contribution to society. Further, as a rapidly evolving field, the opportunities to gain insight and understanding through academic research are compelling. In response to these trends, over the past five years INSEAD has developed a number of programmes focused on impact investing – creating new knowledge, frameworks and tools needed to prepare the next generation of impact investors and advance the sector. These programmes attempt to address the challenges faced by various stakeholder groups as they aim to keep up with the dynamic pace of growth and innovation in the field, including:

• MBAs who seek to build a career in impact investing but lack the understanding, skills and network to do so
• Alumni already working in the field (or hoping to transition into it) who are in need of rigorous analysis, insights into trends and contact with peers who might enable them to remain abreast of opportunities
• Social Entrepreneurs who have participated in INSEAD’s upper-level Executive Education Programme²² seeking access to new forms of capital to expand and enter new markets, but who lack current knowledge of the field, access to suitable investors and guidance to become investment ready
• Investors eager to meet the new generation of impact investing professionals and to strengthen the pipeline of promising investments in the field
• Scholars, practitioners and policy-makers who seek to apply their research to the growing body of knowledge, frameworks and best practices within impact investing

To address the needs of these diverse groups, INSEAD has built an integrated sequence of activities around three axes:

1. Research and curriculum: to provide theoretical frameworks and understand essential concepts
2. Partnerships: to promote knowledge transfer across generations, sectors and geographies
3. Networking and career opportunities: to enable students and others in the INSEAD community to advance their impact investing goals

These initiatives have been made possible through the institutional support of INSEAD’s faculty and deans as well as the external support of key figures and organizations in the field. Impact investing initiatives were first initiated by INSEAD’s Social Entrepreneurship Initiative (SEI),²³ to assist MBA students and alumni interested in social impact as well as the SEI’s network of advanced social entrepreneurs from ISEP seeking investment. The SEI began its activities in the sector in 2009 by gaining insight and connections through conference attendance, research and networking with the aim of surveying the field and identifying promising areas in which it could make a contribution. From this an institutional structure emerged.

The process of building institutional support for a new area of work within an academic institution can be time consuming and often frustrating. Changing or adding to the demands of faculty and the administration is an incremental process. Building interest among faculty is a gradual process. It is facilitated as access to doctoral students to carry out research increases, colleagues who share interest in the field grow in number, and research funding mounts. The enthusiastic response and positive feedback from the stakeholder groups have prompted INSEAD’s administration to expand its activities both in scope and scale.²⁴ This, in turn, has created new opportunities to engage INSEAD faculty, deans, students and alumni in roles where they leverage their connections and networks, participate in events, serve as mentors, and take on case writing and research (all described in more detail below). Progressively, the quality of INSEAD’s programmes has brought on greater external recognition and has enabled INSEAD to engage some of the large financial institutions in its work. The growing positive response, both internally and externally, brought with it ever-greater support from the school’s alumni, faculty and management, and interest among students. Some have become inspired by impact investing programmes while on campus to make the field a focal point of their career.

Overall Insights and Recommendations for Building a Programme

•  Define the audience and stakeholders and their interests carefully and involve them in the process of developing a programme
• Cultivate interest among key faculty, well-known alumni and others to build institutional and external credibility
• Articulate the value that impact investment brings to the school, its activities and those associated with it

Research and Curriculum to Promote Impact Investing 

Academic research serves as an essential foundation of INSEAD’s work on impact investing. Often, research is drawn from the community of social entrepreneurs who have participated in ISEP as well as MBA alumni who work as social entrepreneurs and impact investors. Understanding practitioners working in various capacities in the field provides important insights as to the innovations taking place and the challenges that arise. Often, salient research topics are identified by monitoring the obstacles, hurdles and “pain points” practitioners encounter. These have proven to be issues where in-depth academic research is most beneficial to practitioners. Efforts to understand how investors strive to combine profit and impact is the basis of Professor Filipe Santos’ current research on the alignment of impact investor models and the corresponding emergence of tailored financial instruments. This, in turn, enables further analysis on fund hiring practices as well as the organizational models being deployed. 

Research is then linked to curriculum development, which provides an important feedback loop to gain a better understanding of sector evolution. Whether aimed at investment professionals, entrepreneurs or informed and responsible business leaders, formal coursework creates an opportunity for students in the MBA, Executive MBA (EMBA) and Executive Education programmes to gain insight and explore practical frameworks that promote innovation and sector growth. At INSEAD, this takes several forms.

Case studies have proven to be a very effective learning tool. The focal point of a case study is often identified by scanning the members in the INSEAD network in an effort to find an actual experience that illustrates a particular business challenge identified in the research. Case writers then interview the subjects and prepare the cases with a view towards bringing out the desired teaching points. These cases are then taught in INSEAD’s social entrepreneurship and other relevant courses as well as at other academic institutions through INSEAD’s participation in the European Case Clearing House (ECCH) for global distribution.

For example, the Nuru Energy²⁵ case profiles Sameer Hajee, an INSEAD MBA alumnus and Schwab Social Entrepreneurship fellow, who created an innovative LED modular lighting solution for off-grid users as a safe and inexpensive alternative to kerosene. The case focuses on a number of key teaching points, including the use of carbon credit financing through the Bank of America as well as lighting technology and mobile money payments. Sameer often joins class discussions of the case either in person or virtually. In 2012, this case won the EFMD²⁶ case writing award in the African Business Category for its innovation. Another case study focuses on impact investing infrastructure itself. The case examines how Social Finance’s²⁷ business model can be structured to balance the company’s mission of providing expert guidance on social impact bonds while ensuring financial sustainability. Whenever possible, representatives from Social Finance, such as Toby Eccles, participate in class sessions.²⁸

Another effective teaching tool is through simulations. In this vein, impact investing units are included in the INSEAD Social Entrepreneurship Bootcamp, a 48-hour intensive course that brings students from idea to pitch phase of a social enterprise. The boot camp is offered as an elective to INSEAD’s MBAs and EMBAs and is open to alumni and external participants. The impact investing module examines the range of stakeholders, available investment instruments, terminology, and type and terms of investment most suitable at various points in the life cycle of a social enterprise. As part of the boot camp, students target and pitch to impact investors. The exercise demonstrates how impact investing differs from traditional investment and funding sources to better understand this new approach.²⁹ The boot camp model has proven so successful that it is expanding globally through INSEAD’s partnerships with social enterprise organizations, such as the Impact Hub.³⁰

Our programmes also seek to mainstream impact investing into subject areas that would not otherwise focus on social impact and to include experiential project opportunities. To illustrate, we have included impact investing in a private equity elective. As the number of limited partners requesting impact products grows, mainstream firms are quickly seeking expertise to meet this demand. Project work within the private equity elective enables students to work directly with impact investing funds to understand how these funds operate. SEI routinely assists in recruiting MBAs for internships and field projects for ISEP alumni and others in the school’s network through its newsletter listings and individual guidance to students. Recently, an INSEAD team was engaged by Willow Impact Investments³¹ to carry out a market study.

The length and scope of the projects need to be crafted to fit within the structure and curriculum of the academic institution. This poses additional challenges at INSEAD due to the compressed ten-month duration of the MBA programme and the frequent campus changes by students. This limits the project and coursework to two-month segments and requires that the scope be quite focused. Other schools may have the opportunity of conducting longer projects potentially incorporating site visits and field experience. In any case, the projects offer real tangible value to the volunteers as well as to the organizations themselves.

Impact investing also plays a key role in INSEAD’s ISEP executive education programme. Now in its tenth year, the programme is aimed at upper-level social entrepreneurs and “ecosystem” players who support them. Some investors and venture philanthropists who have attended the programme include the Khalifa Fund for Enterprise Development, Rabobank, ADM Capital Foundation, Lombard Odier, Big Society Capital and more. Since nearly all ISEP executive education sessions include impact investment practitioners, they frequently serve as a resource to present and discuss their work with social entrepreneurs as well as INSEAD’s MBAs. Communication, preparation and aligning expectations between the social entrepreneurs and impact investors form a key portion of the teaching, as does facilitating networking among the various actors in this field. As such, teaching modules include panels featuring practitioners and culminating in networking sessions that inform each party on expectations and possible investment opportunities.

Insights and Recommendations on Research and Curriculum

• Look to practitioners to help define the most promising research opportunities and priorities. 
• Ensure there is a solid research foundation and incentives to engage leading faculty in impact investing initiatives. 
• Be bold and innovative in developing new curriculum and teaching methods and monitor their effectiveness routinely.³²
• Mainstream impact business and investment cases, identify prominent speakers and seek out opportunities and programmes that give students real-world experiences.

Partnerships to Promote Knowledge Transfer

Knowledge transfer within and beyond INSEAD is a key priority for the school, one achieved through building partnerships and organizing leadership events to reach broader audiences. These partnerships are usually initiated through contacts made at conferences and events as well as through INSEAD’s global pool of alumni. Once contacts are made and opportunities are identified, exploratory conversations between the prospective partners and INSEAD’s faculty and staff are initiated. At this point, it is necessary to identify the value proposition for both sides. INSEAD’s value primarily stems from its expertise in impact investing garnered over the years as well as its global network, both of which allow the school to work with top practitioners worldwide. 

INSEAD’s role as exclusive knowledge partner for the Global Impact Forum³³ in Zurich (previously “Partnering for Global Impact”) has been instrumental in expanding the transfer of knowledge and information on impact investing. The collaboration has linked transformative solutions to some of the world’s most pressing social challenges to those with the resources needed to address them. The two-day event serves as both a venue to present some of INSEAD’s leading research and frameworks as well as an opportunity for social entrepreneurs to present their work to potential investors. Through an innovative one-on-one meeting platform designed to connect participants, the conference prioritizes creating real opportunities for investment. Communication and clarity among those participating in the event have been dramatically enhanced by INSEAD’s preparation of a glossary of terms.³⁴ The glossary has gone on to become an invaluable reference document for other impact investing activities.

INSEAD convened “Impact Investing: Creating an Industry from Innovations”³⁵ in May 2013 on its Fontainebleau campus and brought together over 200 leading practitioners, academics and students focusing on the field. In addition to the presentation of new research and lively discussions on recent developments, the conference created a platform for networking and sharing innovations among practitioners. Videos of all discussions and a conference report written by MBA student reporters allowed for accessible knowledge transfer following the event.

As part of its annual programme of social entrepreneurship conferences, INSEAD collaborated with three dynamic Brazilian groups: the Institute of Corporate Citizenship, ARTEMISIA and Vox Capital,³⁶ to present a conference on “Social Finance and Impact Business” in São Paulo, Brazil, in May 2014. The event was sought to strengthen the ecosystem of the sector in Brazil and across the region. With more than 550 participants attending, the conference focused on promoting impact investing, understanding the field, engaging private and public sector participants, and establishing the structures that would enable it to thrive. At its conclusion, the launch of a Brazilian Social Finance Task Force was announced. This new body, led by some of the nation’s leading business and government figures, is mandated to create mechanisms and structures to facilitate the flow of resources to meet the needs of this burgeoning field. It exemplifies the role business schools can play in drawing on the expertise developed in one part of the world to promote innovative solutions in another.

The Morgan Stanley Sustainable Investing Challenge³⁷ is another important partnership for INSEAD in this space. The Challenge is a partnership among the Morgan Stanley Institute for Sustainable Investing, the Kellogg School of Management at Northwestern University and INSEAD. It is the successor and builds upon the former International Impact Investing Challenge, intensifying the focus on the potential for scalable, market-based solutions. The competition asks graduate students worldwide to develop institutional-quality investment vehicles that aim to achieve positive environmental or social impact as well as competitive financial returns. Fifteen INSEAD teams participated in a recent competition with many students stating that the event convinced them that impact investing was a career path they wanted to follow upon graduation. The competition is unique in that it provides an opportunity for students, professionals and investors in the sustainable investment space to work together on concrete, results-oriented ideas. Alumni and social entrepreneurs serve as mentors to student teams as well as judges for submissions. It is inspiring to see the strength of the submitted proposals as well as the powerful connections that are made during the process. For schools interested in organizing such a competition, it could be more beneficial to partner with existing competitions such as the Challenge rather than launching a new competition without a clear market and demand, as the problem of competition fatigue that has arisen for those working with social entrepreneurs is likely to follow in impact investing.

Insights and Recommendations for Partnerships

• Promote opportunities for learning and knowledge transfer that benefit students, practitioners and academics and be sure to capture that knowledge in an accessible form.
• Keep in mind that partnerships and the transfer of knowledge and expertise are powerful when participants have concrete initiatives and see actual investment possibilities materialize.
• Build alliances with others, including other academic institutions, to add breadth and depth to a programme that might not otherwise be available in a resource-constrained setting.

Networking and Career Opportunities to Advance Goals

The third axis of INSEAD’s impact investing efforts focuses on networking and career opportunities. In such a rapidly developing field, formal structures for recruiting are not widely in place. Therefore, students and alumni have to develop contacts independently and early on to advance in the field. INSEAD has developed a number of initiatives to facilitate this.

A programme of “Social Entrepreneurs in Residence” (SEiRs) has been established on both INSEAD’s Fontainebleau and Singapore campuses, enabling students to meet with social entrepreneurs and impact investors through general presentations and 30-minute one-on-one sessions. These meetings often result in projects, internships and even job offers. As such, facilitating these early personal exchanges is crucial to allowing theory to turn to practice. The participating students benefit greatly from the personal exchange with experts, and INSEAD’s SEiRs are able to “interview” potential candidates for their projects and internships.

To give students an opportunity to become acquainted with leading practitioners in the field of impact investing and impact business, Social Impact “Treks” to key cities are organized on a regular basis. Many recent treks (to London, Paris and Geneva) have focused on impact investing. The trek format allows groups of 20-30 students to connect with alumni and partners working in the field and make contacts that can lead to internships and job offers. Recent visits have included visiting INSEAD alumni at Bridges Ventures, Big Society Capital, Social Finance, Generation Investments, the Soros Economic Development Fund, and more. Some of these alumni were themselves participants on past treks and found that they served as catalysts to help land their “dream job”. These meetings are arranged with support from the SEI and its network as well as the INSEAD Career Development Centre (CDC), which has staff focused on both social impact and on impact investing. In addition, staff of the SEI and CDC meet regularly to exchange contacts and participate on calls to generate career opportunities, which complements these activities.

Professional conferences and meetings serve as an important third leg of this approach. INSEAD creates opportunities for students to gain access to various conferences and events by offering their services to prepare conference session reports in exchange for registration fee waivers. Recent conferences and meetings have included the European Venture Philanthropy Association,³⁸ Asia Venture Philanthropy Network,³⁹ Asia IIX,⁴⁰ and others. In some cases, students are even able to receive course credit for this work.

Finally, by bringing prominent impact investment speakers to campus, students are able to gain access to some of the leading figures in the field. These visits are promoted through student clubs (e.g. INSEAD’s INDEVOR Club focused on social impact and business, the Private Equity Club) and by the SEI and CDC. Through these efforts, many students gain awareness of the opportunities open to them in the impact investing space.

Insights and Recommendations for Networking

• Enrich theoretical classroom learning by linking students, alumni and faculty with practitioners to provide opportunities for internships and practical field experiences.
• Build “pathways” for ongoing communication and networking through face-to-face meetings and events.
• Work closely with the career and alumni relations departments to attract new contacts and recruiting opportunities.
• Monitor and evaluate initiatives to determine those that bring about the greatest impact and enable accomplishments to be communicated.

Lessons Learned and Moving Ahead

The impact investing community and its practitioners are hungry to learn, open to collaborate and willing to share and exchange ideas and practices. Academic institutions can play a critical role in creating frameworks and models to help understand these changes, but the role of practitioners engaged in creating these changes is essential. Practitioners and colleagues at other institutions are an important source of insight and inspiration.