Capitalizing on Capitalism: How Impact Investing in Geneva Emerged among the Traditional Financial Field

Abstract

Coined by the Rockefeller Foundation in 2007, impact investing has often been showcased as a disruptive approach to finance, by its promoters. This paper examines the emergence of impact investing in Geneva and shows that this discourse can be qualified when it comes to the concrete conditions of its emergence, as a field. Literature on impact investing emergence has mainly examined this process under the lens of its intermediary status and its connection to various proximate fields, especially the state. But the present case shows a local emergence that is driven by incumbent market actors from traditional finance. We argue that such an emergence relies on strategies capitalizing on microfinance, a characteristic practice of Geneva, controlled by the main financial actors of the city. Based on qualitative fieldwork consisting of interviews and document analyses, the paper reconstructs the rise and evolution of impact investing in Geneva over the past two decades, showing that dominant private banks of Geneva directly or indirectly propelled most of the asset management firms positioned today in impact investing, relying on various mechanisms, such as practice relabeling, and strategic innovations.