Capitalizing on Capitalism

Several studies have been exploring how impact investment initiatives have been developed in

various countries. Some of them show that the “impact investing” label is the result of the joint

effort of market players, public institutions and political actors. In the United Kingdom, social

impact investing was meant as a welfare policy relying on unclaimed assets used for the creation of

a “social investment bank” (Golka 2019, 2023). In France, it was an asset class’s label controlled

by the state and linked to the “Économie sociale et solidaire”, which refers to economic activities

which follow specific criteria, such as being useful to society as a whole, and not focused only on

profit-making (Chiapello and Godefroy 2017). But impact investing is not always the consequence

of the cooperation of various fields that would result in a state-guaranteed label tied to a specific

political or social vision. In this article, we examine the development of impact investing in Geneva,

Switzerland, and question its relationship to financial and non-financial actors. Through this case,

we show that impact investing’s strong ambitions towards existing financial markets that must

reportedly be “reshaped”, are not pivotal in its emergence. On the contrary, we argue that impact

investing mostly acts as a label used by existing financial actors to categorize their initiatives when

other labels are being jeopardized by global events or when worldwide financial evolutions offer

new ways of conducting financial activities prone to grant strategic advantages on existing markets.

To this end, we consider impact investing in Geneva as an emerging field (Fligstein and McAdam

2012) and demonstrate that skilled social incumbent actors from traditional finance of the city

fashioned its settlements through strategic actions and resource deployment. Hence, we show that

the local rise of impact investing was largely due to an extension of the previous field of commercial

microfinance in which powerful financial actors of the city played a key role. This filiation between

impact finance and microfinance appears as a core characteristic of the Geneva case: after having

showcased microfinance as an innovative and virtuous form of investment, Geneva’s asset managers

relabeled such activities as “impact investing”, as the new concept offered more flexibility and

4

dismissed reputational risks tied to microfinance crises. These incumbent actors from traditional

finance hence managed to build a specialized sub-field of finance and occupy dominant positions

in it, by drawing on transnational symbolic resources and local alliances with the field of

international development, while choosing themselves the structuring conditions of this field, that

was not controlled by external actors, such as the state, NGOs, or other organizations.

This paper offers two main contributions. First, it builds on existing works addressing the

conditions of emergence of impact investing in various places, showing that the case of Geneva

features a financial incumbent-driven development, where structuration processes mainly rely on

relabeling of and capitalizing on existing activities, here, microfinance. Through the adopted field

perspective, our study highlights the interconnectedness of different social spaces, while

emphasizing the crucial role of existing dominant financial actors and structures in impact

investing’s settlement. Second, this analysis fosters questioning on the consequences of such a

finance-led development. Whereas impact investing is often described as a disruptive way of

conducting financial activities, observing this phenomenon as a commercial relabeling taking place

within traditional financial fields begs the question of the movement’s objective and positioning.

This paper is structured as follows. In the next section (2.) we expose our data and methods. Then,

we present our empirical findings (3.). Finally, we discuss them and conclude on the conditions

under which financial incumbent-led emergence of impact investing can take place, and question

the possible consequences of such developments (4.).

2. Data and methods

Like other transnational phenomena, impact investing is also locally anchored, and studying this

local anchoring—here, through the case of Geneva—is crucial to understand its concrete

implementation mechanisms (Attencourt and Siméant 2015). Geneva has a long financial and

5

banking history and a highly integrated financial field (Araujo 2020; Mazbouri and Guex 2010)

dominated by ancient families and private banks active in wealth management. Geneva is also

known for its philanthropic initiatives, led by foundations and banks (David and Heiniger 2019;

David, Heiniger, and Bühlmann 2016; David et al. 2016). The case of Geneva, finally, also has the

perk of being quite suitable to a thorough emergence analysis. The main reason for it is the small

size of its financial ecosystem, due to the hegemony of a few historic families, and a limited number

of influent companies. This specific local situation enables us to follow the main individuals who

designed the field, and hence, offer a detailed analysis of the phenomenon.

To this end, our fieldwork consists of direct and participant observations at events related to

sustainable finance, where we first identified and mapped the main actors of the field. We hence

focused on asset management firms specialized in impact investing (n = 8). Moreover, we looked

at other actors in the field: individuals who played a structuring role the configuration of the impact

investing field; banks that offer impact investment products, but are not specialized in it; and other

surrounding actors, such as associations supporting such initiatives and actors from international

organizations and NGOs. Our main data sources are semi-structured interviews (n = 50),

conducted online and in person, in French or English. Interviews lasted between one and two

hours. We interviewed at least one executive for each of the specialized impact companies, but

often also did a second interview with a more operative manager2. We aimed at covering the field

exhaustively, both to understand its structure and its origination. As a consequence, interviewees

were added along the way, as we learned more about the process of the field emergence and

contacted people who had a role in it. We also analyzed the annual reports of the specialized impact

investing asset managers, and gathered other marketing documents. All interviews were

transcribed, and qualitatively analyzed through the software Atlas-Ti. For this paper’s purposes, we

2 The research project, which is financed by the Swiss National Science foundation, is interested also in other

aspects of the impact investment market, which are not part of the study presented here.

6

mostly relied on an analysis that focuses on the processes of field creation and consolidation. This

led us to pursue a genealogical approach (Agrikoliansky, Fillieule, and Mayer 2005; Balsiger 2016)

to the field emergence: we went back from the actors present in the field today, to find out how

the field was created. In the empirical analysis, names of organizations have been changed, and

interviewees are only mentioned by their institutional affiliation. Only four major individuals are

being referred to by the same letter (A, B, C, D), throughout the analysis.

3. Empirical analysis

Today’s field of impact investment in Geneva is populated by firms that were created at different

times. Just focusing on the specialized asset managers (and thus disregarding the traditional private

and commercial banks that offer impact investing products), one sees that some companies were

funded a couple years prior or after 2010, a few more were created later, and two more, which are

firms active in microfinance, already existed in the early 2000’s. This is a particularly salient

observation for the analysis of the emergence of the field: some of the companies actually pre-exist

the coinage of the very term “impact investment”, in 2007. At the same time, it also shows that

many of the firms that constitute the field were created after the term existed. From afar, and just

judging from the age of organizations, it thus looks like this field was created partly by incumbents,

and partly by new actors. But of course, this is a very crude indicator. Through the interviews we

conducted, we identified much more precisely the process of emergence of the field of impact

investing and of the role of incumbent actors therein. We hence show how impact investing in

Geneva settled as a label capitalizing on existing forms of financial activities secured by incumbent

actors from the traditional financial field of the city.

In the first empirical section, we will examine the emergence of microfinance in Geneva in the late

20th century, a type of investments made in developing countries. We will show that this practice

was structured as a subfield within the existing financial field and by several of its powerful actors.

7

The second section will focus on the period running from 2008 to 2014, when the term “impact

investing” was coined by the Rockefeller Foundation. We will study the processes through which

the Geneva impact investment field emerged from the microfinance one, using relabeling and

diversification strategies relying on both microfinance practices and the new “impact investing”

concept.

3.1 Before impact: the emergence of a microfinance field among Geneva traditional

finance

Impact investing in Geneva was not generated in a void: it emerged within an existing field,

microfinance. To comprehend the emergence of impact investing, one needs to understand the

processes that supported the development of microfinance in Geneva. Microfinance practices

settled within the financial field of Geneva, thanks to the essential support of central incumbent

actors of the local financial center: the private banks.

Although the financial center of Geneva includes several types of institutions (Araujo 2020;

Mazbouri and Guex 2010), namely cantonal and major commercial banking firms, its most

characteristic and arguably historically most important feature are the private banks. They largely

dominated the Swiss financial ecosystem of the 19th century (Mazbouri and Guex 2010), especially

in Geneva. Private banks are financial organizations which offer personalized support to rich

clients, traditionally rich families, in asset and wealth management. Unlike other banks, only wealthy

people can become clients of a private bank. These dominant private banks were characterized by

a strong control exerted by what has been called an “aristocratic bourgeoisie”, referring to rich

families which benefited from an ancient reputation, an important involvement in the financial

affairs of the city, and an aristocratic way of life (Cassis 1991). As shown by Araujo and Mach

(2018), these families secured their institutional control throughout the decades—and centuries—

contributing to an exceptional stability of their firms’ associates (Fernandez Perez and Colli 2013).

8

Indeed, in some of these banks, people with the same family name have been in charge for more

than 200 years, showing that the firms were transferred within the same family, and often to direct

descendants. In short, the financial center of Geneva is profoundly marked by a set of strongly

anchored incumbent actors, historically rooted in the banking landscape, and still active today.

Among these incumbents, two institutions specifically played an active role in the development of

sustainable finance, and indirectly, impact investing: Lacour-Deschamps and FAC (Flury –

D’Alverny – Campoli), a financial firm founded by people linked to both Lacour-Deschamps and

Flury—the other major private bank in Geneva. These organizations possess all the features

regarding familial longevity mentioned above, provide wealth and asset management services and

became major worldwide actors. According to the British Scorpio institute, they have been ranked

in the top 25 private banks worldwide by asset under management3. And for instance, one of these

two banks, Lacour-Deschamps, is the most ancient private bank in Geneva (established at the end

of the 18th century) and gathers more than 2,500 employees worldwide4. These famous and wellestablished

groups played a major role in the framing of the sustainable financial practices in

Geneva, by participating in the introduction of a new financial practice: microfinance. This term

refers to investments made in financial institutions whose role it is to fund underprivileged

individuals or micro and small enterprises from the real economy in developing countries. This

approach targets non-Western institutions and aims at providing “financial inclusion” to “frontier”

or “emerging” markets, while monitoring these investments and measuring their social impacts on

the populations through mixed methods and customized indicators that depend on the situation

of the investees (Servet 2006). The creation of the first commercial microfinance company in

Geneva—Green Lotus, founded in 2001—was the result of the encounter between the United

Nations (UN) and the world of private banking, represented by Lacour-Deschamps and FAC. At

3 Le Temps, 2016.

4 Lacour-Deschamps’s Website.

9

that time, the contribution of private finance to the development field started to be discussed

among UN institutions, but was still a very marginal phenomenon. While the official narrative of

the creation of commercial microfinance emphasizes the collaboration between UN institutions

and banks, the accounts we got from interviewees from both sides indicate that while a UN

coordinator (from UNCTAD5), called A, played an important role, this person did not have much

institutional backing. Yet this UN official “toured all the banks” in Geneva but also in other

countries such as Luxembourg, to find allies to start a commercial microfinance fund, and

developed a tool destined to match investors and projects in need of funding. According to one of

the founders of Green Lotus, who then worked at Lacour-Deschamps, the UN official proposed

the project to the bank, which refused because it was already involved in some complicated matters

with a foundation promoting socially responsible investment since 1997, as stated by B, who

worked for both FAC and previously Lacour-Deschamps:

“Green Lotus, in its communication, always says: ‘Green Lotus was founded by the United Nations’. It’s not

quite true, but it’s because I met A, that we put together this thing. […] He is the one who started it. Because

then, I did a project for Lacour-Deschamps, and then they didn’t want to do it, because I was in charge of [X]

at the time and it was a bit complicated as a project because there was a lot of shareholder activism and pension

funds. And Lacour-Deschamps was a bit scared and then they said: ‘no, this is not for us.’” (Interviewee B,

FAC)

After the fund was launched in Luxembourg, a Belgian banker (C), a family member from Lacour-

Deschamps (D), and B (who worked at that time for Lacour-Deschamps) funded Green Lotus,

with the goal of providing management consulting on this fund—it was the beginning of the first

asset management firm oriented towards commercial microfinance in Geneva:

“[In 2001], after I got the idea from A to create a non-profit company but one that would manage impact

funds, I came up with this idea again and I thought: ‘I’m tired of banking’. The banking world, at least at that

time, was not at all conducive to the development of something like I was trying to do. So, I left the bank and

with the blessing of my CEO at the time, I created Green Lotus with D [who is from the Lacour-Deschamps

family]. And we embarked on the adventure. And from the start of the creation of the startup, we received a

management consulting contract [the microfinance fund]. And that’s how Green Lotus started. So, in March

2001, here we are, the two of us… I provide the fund management advice and D knew—linked to his father,

5 UNCTAD stands for United Nation Conference on Trade and Development.

10

obviously—people who could support us. His father was the founder of [an association supporting firm

creations], as you know. And he gave us a lot of support. He really got us started, if you will.” (Interviewee C,

at that time, a Belgian banker)

Thus, two of the partners who launched the first commercial microfinance fund in Geneva came

from the world of Geneva private banks, and were linked to the private banks through family,

business ties, and financial resources. To understand the success of this project, it is also worth

noticing that the private banks—whose actions were crucial in the emergence of Green Lotus—

enjoyed an apparently natural role in this process, since their tradition of personalized financial

support and long-term strategies easily matched the expectations of sustainable finance. This may

be part of the explanation of why they (instead of other kinds of financial actors) bet on

microfinance (Araujo 2020):

“[We’ve been interested in impact] since… well, for some time, since […] we have a philanthropic foundation

that is really very important, so that’s something we’ve always been invested in, and then, throughout our

history, we’ve had impact initiatives. We introduced the ESG in 1997, we participated in the creation of Green

Lotus in 2001, so there has always been a part of the company that has been invested in […] the idea that finance

should also be at the service of society.” (Responsible for sustainability integration, Lacour-Deschamps)

“Geneva’s financial sector is naturally oriented towards the long term and towards a notion of common interest.

It’s not every man for himself, trader, but it’s rather long term. So, there is a phenomenon of this place that is

perhaps a little romantic, but afterwards it is up to the academics to validate this, which is somewhat in keeping

with this idea of the spirit of Geneva, I think.” (Interviewee B, FAC)

In 2005, a second microfinance company, called Harmony, was also launched in Geneva. Similarly

to Green Lotus, the case of Harmony involved incumbent actors, as one of its cofounder is D,

related to one of Lacour-Deschamps historical families which run this private bank. And yet

another microfinance company, AccountFin, was created in Zurich in 2003, with an office in

Geneva too. Although this company is not technically part of the Geneva field of microfinance,

the story of its founding is interesting to consider. According to one of our interviewees, this third

organization was created by a big commercial bank, Credit Suisse, in reaction to the funding of

Green Lotus:

11

“And when they [a wealthy family] heard that Green Lotus was coming they said to Credit Suisse: ‘you have

to do something or we’ll leave you and go to Green Lotus. And they created AccountFin because they didn’t

dare to go head on. Because it’s not easy for a big bank, somewhere, to lend to the poorest people for an

interest, if it turns out to be bad, not only do they steal from the rich, but they also steal from the poor. »

(Interviewee B, FAC)

In all these cases, small companies are created and supported by financial and personal resources

from established banks. These banks refrain from entering this market themselves—partly

probably due to the very small size of this new sector. As an interviewee told us, “a bank doesn’t

want to wipe the slate clean: it wants to see if it works, and if it does, then they’ll get on with it”. But this is not

the only reason. The reputation risks associated with it also play role, as we see in the previous

excerpt.

We then observe a striking continuity between this newly generated subfield of microfinance and

the existing ancient financial field. This new subfield was indeed organized by strong incumbent

actors, namely the private banks, which defined the structures of the field, and acquired central

position in it.

3.2 From microfinance to impact investing: relabeling and expanding

Yet, how did impact investing enter the story told before? The developments after 2008 first must

be reconsidered as part of the broader international context. The rise of impact investment as a

financial category is of course related to the entrepreneurial work of the Rockefeller Foundation

and the organizations that were then created to promote such activities, which enabled local actors

to seize this label and build a local field of impact investment. But another factor is the sociopolitical

context at the time, marked by the financial crisis of 2007-2008, which profoundly affected

the sector. It gave legitimacy to endeavors of sustainable finance and forced financial actors and

regulators into redesigning rules and goals of the financial markets, while imagining new categories

of finance destined to showcase a more responsible, ethical, or sustainable approach to finance

12

(Ziolo et al. 2017). Official discourses from sustainable finance organizations in Geneva hence

consider the subprime crisis a strong catalyzer of the renewal of sustainable finance in the 2010’s:

“After the major crisis of 2008, a number of reforms were put in place, in order to improve the functioning

and integrity of the international financial system. The financial center [ must therefore face these new

challenges, which involve a fundamental change in its business model. However, we must not forget that if our

financial center is today considered one of the most competitive in the world, it is because throughout its

history it has been able to reinvent itself and make room for innovation.” (From a flyer published by Sustainable

Finance Geneva in 2014, an association made of various financial actors promoting sustainable finance)

Moreover, according to several of our interviewees, this crisis fostered development of sustainable

forms of finance, such as impact investing in Geneva. This process was sometimes presented as an

epiphany within the financial sphere, regarding what can be done through finance and what lacks

“meaning”:

“To have had these derivatives that are completely… yes, we don’t know what we’re getting into. Finance makes

a lot of money in these things, so maybe there has been an awareness.” (Market Research Analyst, Impact

Division, Harmony)

“The financial crisis of 2008 brought changes, a general awareness, this awareness also, as I said, a political

sensitivity was already there for a while.” (Senior Relationship Manager, AccountFin)

Yet the rise of impact investing is not only a reaction to the financial crisis. If we look closely at

the processes underlying the establishment and growth of the field after 2008, we find that the

transition from microfinance to impact investing corresponds to a field frame (Lounsbury,

Ventresca, and Hirsch 2003) expansion; i.e., a process in which the new term (impact) comes to

embrace both the old frame and its established practices of lending small sums to poor individuals

or very small businesses (commercial microfinance) as well as adds new practices to it (investment

in equity, in social/green companies in the developed world, in listed companies, etc.).

Three intertwined processes characterize this field frame expansion from microfinance to impact

investment. First, following a major crisis of the microfinance sector, microfinance companies

started to relabel their activities as “impact investing”, but without changing their actual practices.

13

This relabeling mechanisms act as the starting point of the field frame evolutions, sustained by two

other logics. The second mechanism refers to individual actors from established microfinance

companies who developed new practices that went beyond microfinance’s core activity of lending

to poor individuals or very small businesses. This eventually led to the creation of new firms

specialized in impact finance—in one instance, as a result of a scission of one of the microfinance

companies. Third, the newly emerging impact investing field attracted various kinds of newcomers,

adopting different practices of impact investing, some coming out of scissions within microfinance

companies, while others were newly created. This led to a growth and increasing diversification of

the field.

The relabeling phenomenon: how a field frame gets transformed

The first and most salient process explaining the rise of an impact investment field in Geneva is

the relabeling of existing microfinance practices. This process is strongly related to a serious crisis

that hit the microfinance sector in the early 2010’s. At that time, a number of scandals emerged,

involving microfinance, as NGOs and scholars criticized inconsistent lending strategies causing

over-indebtment of poor populations, especially in India, and a series of suicides (Breza and

Kinnan 2021; Hudon and Sandberg 2013; Mader 2013; Taylor 2011). This crisis strongly afflicted

the reputation of the microfinance movement around the world, and some microfinance firms in

Geneva also suffered from it, as shown by the following report produced by Harmony in 2018:

“Following years of exponential growth, the microfinance industry in India, one of the biggest at that time went

crashing in 2010 following reports of waves of suicide from over-indebted microfinance clients in the southern

state of Andhra Pradesh, the epicenter of India’s microfinance sector. […] This was a turning point in the

public perception of microfinance, and threatened the future of the sector in India as well as abroad. Linked to

an above average, uncontrolled growth of the sector, the crisis also brought to light coercive collection practices

of loan officers and general excessive interest rates the sector was facing.” (Harmony, White Paper, 2018)

In this context, the perspective of changing the frames of microfinance became particularly

appealing:

14

“If [impact investing] has become the dominant term, it’s because there was a big crisis in microfinance in 2011,

[…] in Nicaragua: afterwards, there was a crisis in 2012, I think in India, and then finally they saw themselves

forced to change their discourse also towards the academic world which, I think, was much more receptive to

impact investing, than to microfinance, per se. Even so, once again, if you look at the figures, and in particular

if you look at the figures for the industry in Switzerland, in particular… but finally because the Swiss industry is

so important in this field [microfinance], that’s what makes it times. 80%, or even more… 85% of what the

Swiss impact investing actors do is microfinance. It’s just the terminology that has changed, which is a more

open, more inclusive terminology, but ultimately the, what’s behind it is still microfinance, but I think it’s not…

that… the term [impact investing] is more inclusive; it’s sexier.” (Interviewee D, co-founder of Green Lotus)

Thus, a relabeling phenomenon occurred: Green Lotus decided in 2012 to keep its core activities

focused on microfinance, but it progressively relabeled them as “impact investment”. This

evolution is visible on their website. Through the “Way Back Machine” tools6, we notice that the

term “impact investing” was first used in 2010 on Green Lotus’s website. In 2021, the term “impact

investing” is even incorporated in the company’s logo, while the firm’s main activities remain

focused on what was initially called “microfinance”. A similar process can be observed at Harmony,

also specialized in microfinance :

“It happened naturally with the demands and then the needs of the market. At the very beginning, since 2005,

it was rather micro-credit, so only credit products to small entrepreneurs who need to start their business or

working capital. After that, we moved to microfinance, so we’re talking more about financial institutions with

different products, not only credit but deposits, insurance, all that. After that, the sector, in 2007, 2010, we

moved to financial inclusion where […] the goal is to include everyone in the financial system. And from there,

in 2007, there was the terminology impact investing for the first time.” (Market Research Analyst, Impact

Division, Harmony)

But according to Harmony’s employees, there was no real evolution in the concrete activities of

the firm throughout the period. The goal of this was mainly to use the spreading concept of “impact

investing”, according to the practitioners:

“[The question] is also ‘how does a name come about?’ But if you want, as the name has changed too, when

you look at the research papers on impact investing, one of the key themes was microfinance because it is one

of the only ones where there is a track record, which shows that we have made an impact. So when you look

at these papers… it’s true that we have been doing impact investing for ten years, in the sense that we are now

6 https://web.archive.org

15

part of a new name. In the sense that we fit into that category. And then, it’s also a bit pragmatic: if everyone

uses a word and you do it, there’s no reason for you to say, ‘well no, I don’t do that’. » (Head of Portfolio

Management, Harmony)

All in all, we do observe a field frame expansion supported by relabeling strategies. Those make

“impact investing” the new label of old microfinance activities, after they were tarnished by global

crises.

Schisms within microfinance firms: beyond microfinance practices

The second mechanism that explains the field frame expansion of the microfinance field in Geneva

consists in the emergence of new firms dedicated to practices that supposedly go beyond

microfinance. These new firms, which stem from the microfinance subfield, are in fact the result

of a schism within Green Lotus.

In 2007, one of Green Lotus’s cofounders, C, suggested that the firm extends its range of financial

services. Until that date, Green Lotus only offered private debt services. C advocated within the

company for the development of private equity solutions, implying the realization of investments

made in the investee’s equity, in the middle and long run, whereas commercial microfinance only

focused on investing in lending institutions in developing countries. This new kind of investment

was then implemented, enabling the diversification of the firm’s activities as new conceptions of

sustainable finance through the self-defined “impact investing” practices emerged. These

evolutions led to the inception of a new company named “Green Lotus – Investments”, whose

activities were devoted to private equity, whereas the former Green Lotus remained in charge of

private debt and was renamed “Green Lotus – Finance”. But C wanted to go beyond the sole

implementation of private equity investments. Observing the evolutions of sustainable finance and

impact investing, he advocated for the development of new financial services, focusing not only

16

on social impact in developing countries, but also on energy, education and health including

environmental impact:

« “At the same time, I told them: ‘I feel that there is a wave coming that will go beyond the financial sector and

there will be a whole series of new business models in access to energy, in access to education, in access to

health, that will have a very strong social and environmental impact and in which we will be able, just like in

microfinance, to make investments, also for financial profitability. So please, let’s do something other than

microfinance.’” » (C, co-founder of Green Lotus)

His proposal was rejected by his collaborators, who insisted that Green Lotus was a brand, specific

to microfinance, and that this brand should not be “dissolved” with practices that were not strictly

speaking microfinance. As a result, he launched his own company, named Lime – Finance, focusing

on this non-microfinance sustainable investments. Initially still part of the Green Lotus group, this

entity eventually became an independent company.

This sequence shows how a new actor, Lime, contributing to the field frame transition towards the

“impact investing” larger label, emerged from the most dominant incumbent entity of

microfinance, Green Lotus. However, it is important to note that the expansion of activities

through Lime are not contesting microfinance, nor are they attempts to deal with the negative

externalities of microfinance. Rather, they are an addition, a way to broaden the financial tools

deployed within microfinance. The solution—a scission—spurs the diversification of the emerging

field of impact investment, which as a broader category can accommodate different types of

activities.

Diversification through newcomers: dynamics of the impact investment field

However, the field of impact investing is not only constituted of actors with a direct lineage to the

earlier microfinance field. Around 2010, a series of newcomers entered the new field of impact

finance and contributed to its diversification. We will here discuss three examples, corresponding

to different types of impact investing and thus to different positions in the emerging field. As the

17

examples shows, all these new companies are in fact strongly connected to incumbent firms from

the Geneva financial field, and especially its private banks. These apparently “external” newcomers

thus actually support our main argument, stating that the development of impact investing remains

very integrated to the broader financial field of the city.

The first case is quite close to the previously discussed example of Lime, although here we do not

observe a scission, but an entrepreneur very closely linked to the two dominant microfinance

companies. Transform was co-founded in 2010 by D, who was already one of the co-founders of

both Green Lotus and Harmony. Moreover, some of his associates also belong to wealthy and

well-known families of Geneva. One of these associates, E, belonging to a major industrial family

of the city, played an active role in the elaboration of the unique fund managed by Transform. His

action contributed to the firm’s viability at the first stages of its development:

“Ha, [my name], it’s clearly an asset. I couldn’t have, without… When we first started, we started the fund in

2011, I told some family members about it, and then they said at our general meeting, ‘you can come and

present your fund.’ So I thought that was cool, yeah. And there were several cousins who said, ‘Okay, we’re

investing in the fund’. [Later on], we decided on a junior share class, which is like a first class, in fact. And there,

I had planned to invest in it; and then there were several investors who told me [that they were interested]; I

accepted those who were really very close, my parents. […] And then, without that, it would have been

difficult.” (Interviewee E, Executive Director, Transform)

In short, far from being an outsider, Transform—even though it does not directly stem from a

microfinance asset manager—is the result of the action of a few incumbents, including D and E.

They mobilized social and economic capital in order to launch the project, while already knowing

the dynamics of this newly emerging field frame of impact investing—especially since D was one

of the pioneers of microfinance in Geneva. Overall, this advocates for a very internal and integrated

development of impact investing.

The second case we will briefly discuss is the firm Regenae, founded in 2010. This firm is positioned

very differently than the previous ones, as it does not invest in developing countries, but finances

18

entrepreneurial activities in Switzerland and other European countries. Thus, it speaks to the

diversification that characterizes the rise of the impact investing field. In the firm’s discourse, one

finds a very activist stance and a strong critique of traditional finance—much stronger than in most

other cases of impact finance in Geneva. Yet Regenae is also closely related to incumbent actors

from the Geneva financial field. It was founded by an actor who was a partner in FAC (which help

launch Green Lotus), a crucial actor in the beginnings of the microfinance field. As the quote below

shows, Regenae was initially even envisioned as being part of FAC itself. Yet eventually, it was

decided that the partner should launch it as an independent firm, with a very “activist” profile:

“Regenae, you know, [its founder] was my partner here in fact, and then we did this together, they left [FAC],

because we were still small, but already too big to be able to integrate this activism. […] He really wanted, after

the financial crisis, to do something radical in terms of impact, and we thought: ‘it’s better to do this separately

rather than internally’, because not everyone could relate to it. (Interviewee B, currently at FAC, cofounder of

Green Lotus)

The third example is the case of Hecate, an impact investing firm created in 2019. Hecate stands

for another way of doing impact investing: it develops funds that invest in listed companies,

coupled with a quantitative way to measure impact developed in collaboration with EPFL, a leading

Swiss University. As in all the other cases, Hecate is related to an incumbent actor—in this case,

the Swiss private bank Lamy:

“Hecate was created two years ago, […] with the objective […] to create impact investment solutions. […] We

have a majority shareholder which is a [private] bank, which is the Lamy Bank […] and in fact, the idea was for

them to develop a unit which did not have all of a sudden conflicts of interest or in any case a double discourse

in relation to a certain number of things that traditional finance would still be financing, and all of a sudden

Hecate which becomes very vocal on certain things that it wishes… in which it wishes to invest. So, the fact

that we are independent, a fully dedicated unit, allows us to be very strict, at least in the way we define impact.”

(Head of Research, Hecate)

The inception of Hecate could be then analyzed as a typical strategy of big firms willing to innovate

and expand their business and imitate other firms, whilst keeping a certain stability within their

main organization (DiMaggio and Powell 1983), here, in order to avoid any exposure to criticisms.

Therefore, Hecate is not really a challenger, since it benefits from the resources of a central and

19

senior actor of the field, Lamy. Actors such as Hecate contribute to the expansion of the impact

investing field, as they seize it—lately—, but they are not pivotal in its emergence.

4. Conclusion

Impact investing’s promoters present it as a new practice that challenges existing forms of

investing, and criticize how the dominant financial field works. As an alternative, they promote a

form of investing that seeks to achieve measurable social or environmental impact, offering

solutions to the world’s most pressing problems, while at the same time not sacrificing the

investor’s financial interests. However, when looking into the rise of impact investment in Geneva,

we see that this field was shaped by actors who have very close connections to incumbent firms of

the traditional financial field, in particular private banks. Contrary to most of the cases studied so

far by the literature, the rise of this practice as a local field does result from the intersection of

public and private forces. On the contrary, people creating ventures in this field are almost

exclusively part of the financial elite. Thus, this paper highlights two key takeaways.

First, actors at the origin of impact investing in Geneva are not moral entrepreneurs seeking to

disrupt traditional finance, but incumbent actors from the financial field who strategically occupy

and/or create a tangent field, around microfinance. In spite of some of the rhetoric around impact

investing, the goal, at least in Geneva, was not to oppose financial field’s dominant practices.

Instead, they built a parallel field, a niche, that develops an alternative practice. The study shows

that the individual actors taking part in this process are all part of the financial field: they work in

private banks and/or belong to the most influent families of Geneva private banking. By launching

different ventures specialized in different forms of sustainable investment, they manage to build

and dominate a newly emerging field. To do so, they sometimes quit the positions they held

previously, and take certain financial risks to do something that, in their discourses, has more

meaning. Yet, they do so in a very cushioned way, thanks to the social and economic capital they

20

have. Could it be otherwise—would it be possible for challenging actors to launch the kinds of

impact investing ventures that we observe? Impact investing implies to gather high to very high

sums in order to launch meaningful investment vehicles, and to do so, one needs to have access to

large amounts of “patient capital”. It seems very difficult for challenging actors (and even more so

for actors from outside of the financial world) to achieve such projects. Thus, the specificity of

finance seems to be an obstacle for a challengers-driven moral market to emerge.

The second point we want to make concerns the structuration and dynamics of the impact

investment field that emerges through such an internal process. The moral markets literature has

shown how moral status plays an important role in the structuration of such markets (Balsiger

2021; Suckert 2018). Conventional firms cannot just enter challengers-driven moral markets

without risking criticism and targeting by social movement actors. This why they often collaborate

with social movement actors when entering such markets, for instance by adopting labels (Kim

and Schifeling 2022). In the case studied here of an internal emergence of a moral market, we do

see that moral status or moral legitimacy does seem to play a role—the incumbent actors refrain

from entering these markets directly, at least in the beginning. However, in the further dynamic of

the impact investing field, we observe a very broad diversification that leads to little open conflict

and criticism: as the field frame expands and the “impact investing” label grows, more and more

various actors freely join the field and claim this label. A central result of this research is that

“impact investing” in Geneva is actually more a label than a practice, in the field’s structuration. In

other words, it barely challenged existing practices, and was mainly used as a way of relabeling old

practices, or justifing the strategic diversification of them. Indeed, microfinance forms the substrate

of these relabeling processes and consequently fueled the practical innovations around sustainable

finance, by encompassing various financial products deemed “sustainable”, “social”, or

“environmental”. All in all, financial incumbent-led emergence of impact investing has

consequences on the activities labeled as such, since it fosters its exploitive usage as a flexible

21

marketing label. As the concept of “impact investing” is spreading into the financial world, it is

crucial to examine the conditions of its enactment in local contexts, to identify how it shapes the

practices it encompasses and their consequences.

22

References

Agrikoliansky, Eric, Olivier Fillieule, and Nonna Mayer, eds. 2005. L’altermondialisme En France. La

Longue Histoire d’une Nouvelle Cause. Paris: Flammarion.

Antadze, Nino, and Frances R. Westley. 2012. “Impact Metrics for Social Innovation: Barriers or

Bridges to Radical Change?” Journal of Social Entrepreneurship 3(2):133–50. doi:

10.1080/19420676.2012.726005.

Araujo, Pedro. 2020. “The New Swiss Banking Elite? Plurality and Polarization of Careers.”

Université de Lausanne, Lausanne.

Arjaliès, Diane-Laure. 2010. “A Social Movement Perspective on Finance: How Socially

Responsible Investment Mattered.” Journal of Business Ethics 92(S1):57–78. doi: 10.1007/s10551-

010-0634-7.

Attencourt, Boris, and Johanna Siméant, eds. 2015. Guide de l’enquête globale en sciences sociales. Paris:

CNRS Éd.

Balsiger, Philip. 2016. The Fight for Ethical Fashion. The Origins and Interactions of the Clean Clothes

Campaign. Abingdon, Oxforshire: Routledge.

Balsiger, Philip. 2021. “The Dynamics of ‘Moralized Markets’: A Field Perspective.” Socio-Economic

Review 19(1):59–82.

Barman, Emily. 2015. “Of Principle and Principal: Value Plurality in the Market of Impact

Investing.” Valuation Studies 3, 1:9-44,.

Barman, Emily. 2020. “Many a Slip: The Challenge of Impact as Boundary Object in Social

Finance.” Historical Social Research / Historische Sozialforschung 45(3):31–52.

Bourgeron, Théo. 2020. “Constructing the Double Circulation of Capital and ‘Social Impact.’ An

Ethnographic Study of a French Impact Investment Fund.” Pp. 117-139, in Social Finance, Impact

Investing, and the Finanizalization of the Public Interest, Special Issue of Historical Social Research, edited by

E. Chiapello and L. Knoll.

Breza, Emily, and Cynthia Kinnan. 2021. “Measuring the Equilibrium Impacts of Credit: Evidence

from the Indian Microfinance Crisis.” The Quarterly Journal of Economics 136(3):1447–97. doi:

10.1093/qje/qjab016.

Bugg-Levine, Antony, and Jed Emerson. 2011. Impact Investing: Transforming How We Make Money

While Making a Difference. 1st ed. San Francisco: Jossey-Bass.

Cassis, Youssef. 1991. “L’histoire Des Banques Suisses, Aux XIXe et XXe Siècles.” doi:

10.5169/SEALS-81071.

Chiapello, Eve, and Gaëtan Godefroy. 2017. “Die Doppelfunktion Der Beurteilungsinstrumente.

Warum Die Pluralität Der Marktklassifikationen ZähltThe Dual Function of Judgment Devices.

Why Does the Plurality of Market Classifications Matter?” Historical Social Research / Historische

Sozialforschung Vol. 42 No. 1:Volumes per year: 1. doi: 10.12759/HSR.42.2017.1.152-188.

23

Cohen, Sir Ronald. 2020. Impact: Reshaping capitalism to drive real change. London: Ebury Press.

David, Thomas, and Alix Heiniger. 2019. Faire société: la philanthropie à Genève et ses réseaux

transnationaux autour de 1900.

David, Thomas, Alix Heiniger, and Felix Bühlmann. 2016. “Geneva’s Philanthropists around 1900:

A Field Made of Distinctive but Interconnected Social Groups.” Continuity and Change 31(1):127–

59. doi: 10.1017/S0268416016000114.

DiMaggio, Paul J., and Walter W. Powell. 1983. “The Iron Cage Revisited: Institutional

Isomorphism and Collective Rationality in Organizational Fields.” American Sociological Review

48(2):147–60. doi: 10.2307/2095101.

Emerson, Jed. 2018. The Purpose of Capital: Elements of Impact, Financial Flows, and Natural Being.

Fernandez Perez, Paloma, and Andrea Colli, eds. 2013. The Endurance of Family Businesses. Cambridge

University Press.

Fligstein, Neil, and Doug McAdam. 2012. A Theory of Fields. Oxford, New York: Oxford University

Press.

Golka, Philipp. 2019. Financialization as Welfare. Social Impact Investing and British Social Policy, 1997-

2016. Berlin: Springer.

Golka, Philipp. 2023. “The Allure of Finance: Social Impact Investing and the Challenges of

Assetization in Financialized Capitalism.” Economy and Society 52(1):62–86. doi:

10.1080/03085147.2023.2151221.

Hudon, Marek, and Joakim Sandberg. 2013. “The Ethical Crisis in Microfinance: Issues, Findings,

and Implications.” Business Ethics Quarterly 23(4):561–89. doi: 10.5840/beq201323440.

Kim, Suntae, and Todd Schifeling. 2022. “Good Corp, Bad Corp, and the Rise of B Corps: How

Market Incumbents’ Diverse Responses Reinvigorate Challengers.” Administrative Science Quarterly

00018392221091734. doi: 10.1177/00018392221091734.

Leins, Stefan. 2020. “‘Responsible Investment’: ESG and the Post-Crisis Ethical Order.” Economy

and Society 49(1):71–91. doi: 10.1080/03085147.2020.1702414.

Lounsbury, Michael, Marc Ventresca, and Paul M. Hirsch. 2003. “Social Movements, Field Frames

and Industry Emergence: A Cultural-Political Perspective on US Recycling.” Socio-Economic Review

1:71–104.

Mach, André, and Pedro Araujo. 2018. “Longévité Des Familles à La Tête Des Banques Privées

Suisses. Trois Exemples de Trajectoires Contrastées.” Revue Vaudoise de Généalogie et d’histoire de

Familles 30:49–62.

Mader, Philip. 2013. “Rise and Fall of Microfinance in India: The Andhra Pradesh Crisis in

Perspective.” Strategic Change 22(1–2):47–66. doi: 10.1002/jsc.1921.

Mazbouri, Malik, and Sébastien Guex. 2010. “L’historiographie Des Banques et de La Place

Financière Suisses Aux 19e-20e Siècles.” doi: 10.5169/SEALS-306555.

24

Servet, Jean-Michel. 2006. Banquiers Aux Pieds Nus: La Microfinance. Paris: Odile Jacob.

Soule, Sarah A. 2009. Contention and Corporate Social Responsibility. Cambridge: Cambridge University

Press.

Suckert, Lisa. 2018. “Unravelling Ambivalence: A Field-Theoretical Approach to Moralised

Markets.” Current Sociology 0(0):0011392117737820. doi: 10.1177/0011392117737820.

Taylor, Marcus. 2011. “‘Freedom from Poverty Is Not for Free’: Rural Development and the

Microfinance Crisis in Andhra Pradesh, India: Rural Development and Microfinance in Andhra

Pradesh, India.” Journal of Agrarian Change 11(4):484–504. doi: 10.1111/j.1471-0366.2011.00330.x.

Tekula, Rebecca, and Kirsten Andersen. 2019. “The Role of Government, Nonprofit, and Private

Facilitation of the Impact Investing Marketplace.” Public Performance & Management Review

42(1):142–61. doi: 10.1080/15309576.2018.1495656.

Waeger, Daniel, and Sébastien Mena. 2019. “Activists as Moral Entrepreneurs: How Shareholder

Activists Brought Active Ownership To Switzerland.” Pp. 167–85 in The Contested Moralities of

Markets. Vol. 63, Research in the Sociology of Organizations, edited by S. Schiller-Merkens and P. Balsiger.

Emerald Publishing Limited.

Ziolo, Magdalena, Filip Fidanoski, Kiril Simeonovski, Vladimir Filipovski, and Katerina

Jovanovska. 2017. “Sustainable Finance Role in Creating Conditions for Sustainable Economic

Growth and Development.” Pp. 187–211 in Sustainable Economic Development: Green Economy and

Green Growth, edited by W. Leal Filho, D.-M. Pociovalisteanu, and A. Q. Al-Amin. Cham: Springer

International Publishing.