The Potential of Impact and Integral Investing for Sustainable Social Development and the Role of Academia in Their Dissemination
Round 1
Reviewer 1 Report
interesting work. I question the need for additional terms beyond impact investing as i believe it subsumes the concepts described under integral investing,but nonetheless I found the data on impact research in the literature of interest.
Author Response
Response to Reviewer 1 Comments
Comments and Suggestions for Authors
Interesting work. I question the need for additional terms beyond impact investing as i believe it subsumes the concepts described under integral investing, but nonetheless I found the data on impact research in the literature of interest.
- This comment is related to another one we received from another reviewer.
The question is now answered in Chapter 7 - Discussion and Conclusion: “… it is necessary to draw attention to language issues. It was shown that the term impact investing is quite well-established whereas there are some problems with integral investing. Moreover, the terms may be translated into other languages and it could be challenging to translate them in a concise and fitting way. Thus stressing the ideas, goals, and principles of impact and integral investing is crucial for proper understanding of these concepts. To proceed from traditional investing through impact investing to integral investing can be a good methodological choice.”
Reviewer 2 Report
Overall, it is a well-founded, enriching and extremely contemporary paper. Some corrections must be made before publication. There is also room for improvement by working out some points more clearly based on the recommendations / comments below.
Formal errors to be corrected:
Lines 151, 152, 167 and 242: "or" should not be italic, the terms, however, should be italic in all cases.
Line 160: "... in which is the research published." - move “is” between “research” and “published” (better: was)
Line 213: replace “from” with “with”
Paragraph 4.5: Replace “integral” with “impact”, also in table 5
Line 287: The sentence is incomplete after ","
Line 306: one “one” too much (“barely one-thousandth”)
Line 219: The trend of citations is actually decreasing, according to table 4, although the number of publications is increasing in terms of a trend. This needs to be addressed differently than it is addressed.
Line 71: I couldn't find this list of criteria in the source [16].
Line 463: “Stahlhofer” instead of “Stahlhoffer”
Formal issues – recommendation:
Table 1: Add “+” for each added element – improves the structure of the table for the reader (e.g. “Profit + [new line] Positive societal, …”)
Issues for clarification:
Paragraph 4.5 and 5.5: In terms of language: Are the terms “impact investing” etc. used as English terms in other languages than English or are they translated? Especially with “integral investing” etc. it could be challenging to translate the term in a concise and fitting way.
Paragraph 5.2: It becomes transparent that there might be an issue with the term “integral investing” – it is clear as soon as you discovered that it is used in “Material Science”. Did you check if the meaning in the other categories is used in the way you defined it by referring to Bozesan’s definition? There clearly seems to be a semantic challenge with this term…
Line 96: I don’t have the source – but I have a doubt: Did Bozesan “argue” or maybe better “claim” that more than “80% of the risk can be addresses by performing integral due diligence on the team”?
Line 387: How can you argue that integral investing is a “proven” concept when there is hardly any scientific literature about it available? What exactly do you mean by “developed”?
Recommendations:
Chapter 7: It is very long and several new topics come up in detail (Business Roundtable, Davos Manifesto, COVID-19, … - why did you pick these and not e.g. climate change?). The framing of these topics seems to be missing. Make sure to point out at the very beginning that all these are reasons why academia should care even more about “impact investing” etc.
You could also give more examples with less details to illustrate the urgency of working on these topics in academia more frequently.
Line 357ff: It is frequently discussed if this type of “doing good” is “true” impact investment – investing into a company with an added, separate e.g. foundation instead of being inherently “good”. Other examples could be mentioned.
The measurability of the metrics, suggested by Bozesan, is not clear [line 348, table 1 and elsewhere]. It would be helpful if you made clear if or give a very brief example of how these metrics are measurable since you argue at the very beginning that not only profit should be used as a measure.
Reading the last paragraph of chapter 2 I also had to think of Raj Sisodia’s latest book, “The Healing Organization” – it could be added to the references.
Line 46: I understand the “spirituality” argument. But why counter it only with the Coronavirus and not also with climate change, biological networks, theoretical physics theories, the butterfly effect, …?
Line 59 Source [1]: I don’t have the source but why not use an original, more generally used definition of impact investment e.g. based on giin.org? It would also contribute to a clear separation of the sources of impact and integral investment definitions. The source which has an interest to promote integral investment should not at the same time be used as the source for the definition that is used for impact investment.
Line 88: You could mention the concept of stuart-ownership (https://purpose-economy.org/en/) which has a very similar goal.
Author Response
Response to Reviewer 2 Comments
Comments and Suggestions for Authors
Overall, it is a well-founded, enriching and extremely contemporary paper. Some corrections must be made before publication. There is also room for improvement by working out some points more clearly based on the recommendations / comments below.
- All comments and suggestions were addressed – please, see below each comment/suggestion
Formal errors to be corrected:
Lines 151, 152, 167 and 242: "or" should not be italic, the terms, however, should be italic in all cases.
- In all cases changed so that the terms are in italic and the "or" operator is not in italic
Line 160: "... in which is the research published." - move “is” between “research” and “published” (better: was)
- The research question is now: “What are the types of documents in which the research was published? “
Line 213: replace “from” with “with”
- The sentence is now: “… the number of citations correlates positively with the time the research was published…”
Paragraph 4.5: Replace “integral” with “impact”, also in table 5
- The wrong term “impact” was replaced by correct “integral”
Line 287: The sentence is incomplete after ","
- To make this part of the text better understandable, the commas were replaced by parenthesis: “Out of the seven titles published since 2013 (i.e. after Bozesan [7] introduced the term integral investing) only the publications recorded in Scopus have been cited…”
Line 306: one “one” too much (“barely one-thousandth”)
- The text is now “barely one-thousandth” (the redundant “one” was removed)
Line 219: The trend of citations is actually decreasing, according to table 4, although the number of publications is increasing in terms of a trend. This needs to be addressed differently than it is addressed.
- The interpretation was changed and is now: “It was shown that the relative numbers of publications on impact investing or impact investment are low, nevertheless, they are cited relatively frequently, meaning that the topic of impact investing is currently of research interest.”
Line 71: I couldn't find this list of criteria in the source [16].
- The text was specified and is now: “Based on Freireich and Fulton [17] and Robeco, Booz & Co [10] Bozesan [18] summarizes the key ESG criteria as follows”
Corresponding changes in references were made too (source 16 is source 17 in the revised version of the article).
Line 463: “Stahlhofer” instead of “Stahlhoffer”
- The name was changed to the correct “Stahlhofer”
Formal issues – recommendation:
Table 1: Add “+” for each added element – improves the structure of the table for the reader (e.g. “Profit + [new line] Positive societal, …”)
- “+” added for each additional element in the column
Issues for clarification:
Paragraph 4.5 and 5.5: In terms of language: Are the terms “impact investing” etc. used as English terms in other languages than English or are they translated? Especially with “integral investing” etc. it could be challenging to translate the term in a concise and fitting way.
- The terms are translated. To address this problem, we extended Discussion and Conclusion by this text: … “In this context it is necessary to draw attention to language issues. It was shown that the term impact investing is quite well-established whereas there are some problems with integral investing. Moreover, the terms may be translated into other languages and it could be challenging to translate them in a concise and fitting way. Thus stressing the ideas, goals, and principles of impact and integral investing is crucial for proper understanding of these concepts. To proceed from traditional investing through impact investing to integral investing can be a good methodological choice.”
Paragraph 5.2: It becomes transparent that there might be an issue with the term “integral investing” – it is clear as soon as you discovered that it is used in “Material Science”. Did you check if the meaning in the other categories is used in the way you defined it by referring to Bozesan’s definition? There clearly seems to be a semantic challenge with this term…
- This problem is really serious and was mentioned in the original version of the article. Now it is stressed more and based on an analysis of the keywords used in the texts is confirmed. At the same time we decided to mention that a new book Integral Investing by Bozesan will be published in November by Springer and this could solve the problem.
This all is now part of chapter 6 Bibliometric analysis – Summary:
“Bibliometric analyses of the publications on the topics of impact investing or impact investment and integral investing or integral investment recorded in WoS or in Scopus were conducted in this research paper to answer the research questions mentioned above.
To summarize the findings, it is possible to say that publications on these topics represent a very small fraction, barely one-thousandth, of the publications on investing or investment. None of the topics are therefore of a broad research interest. Nevertheless, the terms impact investing or impact investment are well established and used in the field of finance and knowledge sharing in impact investing or impact investment in the research community is growing.
The most frequently used keywords (at least 20 times) in the publications show that the terms impact investing or impact investment are used in accordance with the GIIN definition [13]. These keywords (alongside impact investing or impact investment) are social impact, social enterprise, social finance, sustainable, responsible, development.
Serious questions arise about the terms integral investing or integral investment. These terms were introduced and well defined in the field of Finance by Bozesan [7] but have barely received a response in academia. Moreover, even the low number of publications on this topic indicates that the term integral investment or integral investing has not been chosen well because it is also used in other technical research fields.
Even the keywords used in the publications (alongside integral investing or integral investment) indicate the problem. There are not repeatedly used keywords and only Bozesan refers to philanthropy; otherwise keywords such as process optimization, energy consumption, numerical simulation, or stainless steel are given in the texts. Nevertheless, the problem could be solved soon as a book titled Integral Investing authored by Bozesan is supposed to be published by Springer in November 2020 [31].
Line 96: I don’t have the source – but I have a doubt: Did Bozesan “argue” or maybe better “claim” that more than “80% of the risk can be addresses by performing integral due diligence on the team”?
- “argues” was replaced by “claims”, it really may be a better word in this case
Line 387: How can you argue that integral investing is a “proven” concept when there is hardly any scientific literature about it available? What exactly do you mean by “developed”?
- Not to complicate the text, the sentence was changed, “proven and developed” was removed, it is now: “Impact investing and integral investing are concepts with a strong potential to support sustainable recovery and development of our challenged society.“ It is consistent with the following sentence “They are worth being researched and included in university curricula.“
Nevertheless, integral investing is successfully applied in AQAL Group where Mariana Bozesan is a co-founder and a general manager. But we do not consider it appropriate to use the materials of this company as a reference in this scientific article. It might look like their promotion.
Recommendations:
Chapter 7: It is very long and several new topics come up in detail (Business Roundtable, Davos Manifesto, COVID-19, … - why did you pick these and not e.g. climate change?). The framing of these topics seems to be missing. Make sure to point out at the very beginning that all these are reasons why academia should care even more about “impact investing” etc.
You could also give more examples with less details to illustrate the urgency of working on these topics in academia more frequently.
- Chapter 7, Discussion and Conclusion, is considerably reworked and extended to address all parts of this recommendation (see please the revised article). A new first paragraph explaining the content and the structure of the chapter is added.
Line 357ff: It is frequently discussed if this type of “doing good” is “true” impact investment – investing into a company with an added, separate e.g. foundation instead of being inherently “good”. Other examples could be mentioned.
- This part of the discussion was extended by this text: “It can be questioned whether these and similar foundations, e.g. Open Society Foundations, Ford Foundation, Rockefeller Foundation, or Azim Premji Foundation to name a few, make true impact or integral investments. But the fact that they exist is another evidence that there are business people who care about the common good.”
The measurability of the metrics, suggested by Bozesan, is not clear [line 348, table 1 and elsewhere]. It would be helpful if you made clear if or give a very brief example of how these metrics are measurable since you argue at the very beginning that not only profit should be used as a measure.
- We agree that the problem of the measurability of the metrics is very important but at the same time we believe it would be a topic for another article because this problem is quite broad and is not fully within the scope of this article. On the other hand, we understand that some readers can be interested in this problem and we added an explanatory sentence: “Bozesan [16,18] addresses the problem of the measurability of the metrics in deep detail within the Theta model.” The sentence is now at the end of the paragraph below table 1.
Reading the last paragraph of chapter 2 I also had to think of Raj Sisodia’s latest book, “The Healing Organization” – it could be added to the references.
- The suggested reference “Sisodia, R.; Gelb, M.J. The Healing Organization. Awakening the Conscience of Business to help Save the World; HarperCollins Leadership: Nashville, TN, USA, 2019; ISBN 978-0-8144-3981-4” was added. Prof. Sisodia published this book really as Raj Sisodia, even though his full name used also in his previous publications is Rajendra S. Sisodia.
Line 46: I understand the “spirituality” argument. But why counter it only with the Coronavirus and not also with climate change, biological networks, theoretical physics theories, the butterfly effect, …?
- We totally understand this comment. But we have a good reason why we explicitly mention only coronavirus as proof of mutual interconnection and the reason is national culture. There are cultures, and the national culture of the authors is a typical example, where very many people believe only what they can touch, see, and measure. For example, in our country very many people do not distinguish spirituality from religion. And only coronavirus was an impulse when some people in our country have started thinking slightly differently.
With the respect to different cultures and ways of thinking, we added “in some countries or cultures“ and the text is now: „ As the idea of our mutual interconnection might have sounded overly spiritual in some countries or cultures, just a short time ago, the outbreak of the Coronavirus around the world at the beginning of 2020 has made it apparent that it is actually true.“ (“it” in the sentence refers to mutual interconnection).
Line 59 Source [1]: I don’t have the source but why not use an original, more generally used definition of impact investment e.g. based on giin.org? It would also contribute to a clear separation of the sources of impact and integral investment definitions. The source which has an interest to promote integral investment should not at the same time be used as the source for the definition that is used for impact investment.
- The definition of impact investing from the source [1] was replaced by the GIIN definition. The structure of the paragraph was slightly changed to make sense chronologically and is now: “A progressive alternative to traditional investing appeared according to a study coauthored by companies Robeco and Booz & Co. [10] in 1985. Bozesan [1] argues that this year can be seen as the birth year of impact investing. However, Höchstädter and Scheck [11] argue that the term impact investing was coined in 2007, when the Rockefeller Foundation invited leaders in finance, philanthropy, and development to discuss the need for and means of building a global industry that strives for investments with a positive social and environmental impact [12]. In 2009 The Global Impact Investing Network (GIIN), a nonprofit member organization, was established. GIIN defines impact investments as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return” [13]. Impact investing became better known in 2011 through a book by the same title written by Bugg-Levine and Emerson [14].”
Corresponding changes in References were made too.
Line 88: You could mention the concept of stuart-ownership (https://purpose-economy.org/en/) which has a very similar goal.
- The concept of steward-ownership is now mentioned in the Discussion and Conclusion as another example of a not profit-only oriented business approach.
The text is now: “…new business concepts such as Corporate Social Responsibility, B Corporations, Social Entrepreneurship, Economy for the Common Good, Purpose-Driven Business, Conscious Capitalism [34], or Purpose-Economy based on Steward-Ownership [35] have appeared.“
The part of the text around the original line 88 deals with the concept of integral investing according to Bozesan, whereas other examples of not profit-only oriented approaches are given in Discussion and Conclusion.
Reviewer 3 Report
Although I agree with authors that the topic has relevance, I believe that their paper still need some further refinement.
The search for papers that authors consider in their bibliometric survey has been affected by the selection of key words they employed. As I understand, authors only used the following two key words: impact investing and integral investing. However, they did not include some other key words such as: society, sustainability, equity, social accountability, etc.
Using information about paper published in year 2020 in the bibliometric analysis makes comparison across years not effective as it is very likely that several papers written in this year have not yet been included in the WoS and Scopus databases. Additionally, we are still in the mid of 2020.
I suggest that authors also provide a more in-depth analysis of literature, identifying major trends in the literature. Please, provide a list of journals in which papers have been published, the list of key words included in these papers, etc. That will help to enrich the bibliometric analysis and improve the paper.
Finally, I believe that the focus on universities in the dissemination stage may be reductive. The role and influence of universities may be more complex. University research provides knowledge and information that challenge society development. At the same time, such research may be influenced by availability of funds and, consequently, the development trajectory of the society might be affected by the source of these funds. Thus, an important topic to focus on is about the real role of universities.
Author Response
Response to Reviewer 3 Comments
Comments and Suggestions for Authors
Although I agree with authors that the topic has relevance, I believe that their paper still need some further refinement.
- To improve our article we addressed carefully the comments from this review (please see below each comment/suggestion) as well as from the other two reviews we received. The article has undergone major changes.
The search for papers that authors consider in their bibliometric survey has been affected by the selection of key words they employed. As I understand, authors only used the following two key words: impact investing and integral investing. However, they did not include some other key words such as: society, sustainability, equity, social accountability, etc.
- The key terms for the bibliometric analysis were impact investing or impact investment and integral investing or integral investment. The choice of the terms is explained in Chapter 3, 3rd paragraph, and is consistent with the goal of the article (see Abstract): this article seeks to answer the question of whether these concepts (meant impact investing and integral investing) are reflected in academia.
We agree that it is valuable to pay attention also to other keywords (as also suggested below) and we extended our text by a short analysis of the most frequently used keywords in Chapter 6 – Bibliometric Analysis – Summary.
Using information about paper published in year 2020 in the bibliometric analysis makes comparison across years not effective as it is very likely that several papers written in this year have not yet been included in the WoS and Scopus databases. Additionally, we are still in the mid of 2020.
- We had to decide on the researched time period. To have our research as up-to-date- as possible, we included also publications from 2020 (up to late April). In all tables by years, there is a note that data from 2020 are only from January to April.
I suggest that authors also provide a more in-depth analysis of literature, identifying major trends in the literature. Please, provide a list of journals in which papers have been published, the list of key words included in these papers, etc. That will help to enrich the bibliometric analysis and improve the paper.
- In the final part of Chapter 3 there is a list of research questions. Question 3 focuses on the types of documents and dedicated journals: 3. What are the types of documents in which the research was published? Are there any journals dedicated to this subject?
In sub-chapters 4.3. and 5.3 the question is answered including the lists of journals.
The most frequently used keywords were newly analyzed and the results are added in Chapter 6 – Bibliometric Analysis – Summary.
Finally, I believe that the focus on universities in the dissemination stage may be reductive. The role and influence of universities may be more complex. University research provides knowledge and information that challenge society development. At the same time, such research may be influenced by availability of funds and, consequently, the development trajectory of the society might be affected by the source of these funds. Thus, an important topic to focus on is about the real role of universities.
- The role and influence of universities were addressed more comprehensively in Chapter 7 – Discussion and Conclusion. The chapter is considerably reworked and extended – see please the revised article.
Round 2
Reviewer 3 Report
The authors have only partially addressed to my concerns and request for a more in depth literature analysis. Particularly, I suggested authors to identify major trends in the literature. That does not mean identify research questions, but rather to identify relevant patterns or trends that will help researchers to expand in a scientific way the boundaries of knowledge in the field. Employing literature survey and bibliometric analysis to count papers and classify journals remains reductive.
The authors should adopt the title they have chosen for their paper as a guide to develop their literature review and bibliometric analysis. Particularly, bibliometric analysis should investigate how the concepts of "potential impact", and "integral investing" are utilized by researchers in their papers and how they are linked to sustainable social development, and how these concepts and linkages have evolved over time.
Author Response
Response to Reviewer 3 Comments (Round 2)
Comments and Suggestions for Authors
The authors have only partially addressed to my concerns and request for a more in depth literature analysis. Particularly, I suggested authors to identify major trends in the literature. That does not mean identify research questions, but rather to identify relevant patterns or trends that will help researchers to expand in a scientific way the boundaries of knowledge in the field. Employing literature survey and bibliometric analysis to count papers and classify journals remains reductive.
The authors should adopt the title they have chosen for their paper as a guide to develop their literature review and bibliometric analysis. Particularly, bibliometric analysis should investigate how the concepts of "potential impact", and "integral investing" are utilized by researchers in their papers and how they are linked to sustainable social development, and how these concepts and linkages have evolved over time.
To address this complex comment and suggestion, Chapter 6 including its title was considerably extended.
The new title is now “Bibliometric Analyses – Summary and Major Trends in the Literature”
In this chapter, following the comment, we explain why researchers can be interested in major trends in the literature. (It seems there is a small typo in the comment and the concepts of “impact investing” and “integral investing” were meant.)
We clarify that there are too few publications on integral investment to identify some trends. Regarding impact investing, the situation is different. We refer to a review of the literature published until 2017 on the subject of impact investing and analyze the literature from 2018 to April 2020 to find out the development of the trends.
We pay particular attention to the linkage between the concept of impact investment and sustainable social development in this period.
Chapter 6 is copied below.
We extended and revised also the references and mentioned the missing theoretical background for impact investing in Chapter 7 – Discussion and Conclusion:
“… It was shown that despite the lacking theoretical framework the term impact investing is quite well-established whereas there are some problems with integral investing. Moreover, the terms may be translated into other languages and it could be challenging to translate them in a concise and fitting way. Thus stressing the ideas, goals, and principles of impact and integral investing is crucial for proper understanding of these concepts.“
6 Bibliometric Analyses – Summary and Major Trends in the Literature
Bibliometric analyses of the publications on the topics of impact investing or impact investment and integral investing or integral investment recorded in WoS or in Scopus were conducted in this research paper to answer the research questions mentioned above.
To summarize the findings, it is possible to say that publications on these topics represent a very small fraction, barely one-thousandth, of the publications on investing or investment. None of the topics are therefore of a broad research interest. Nevertheless, the terms impact investing or impact investment are well established and used in the field of Finance and knowledge sharing in impact investing or impact investment in the research community is growing.
The most frequently used keywords (at least 20 times) in the publications show that the terms impact investing or impact investment are used in accordance with the GIIN definition [13]. These keywords (alongside impact investing or impact investment) are social impact, social enterprise, social finance, sustainable, responsible, development.
Serious questions arise about the terms integral investing or integral investment. These terms were introduced and well defined in the field of Finance by Bozesan [7] but have barely received a response in academia. Moreover, even the low number of publications on this topic indicates that the term integral investment or integral investing has not been chosen well because it is also used in other technical research fields.
Even the keywords used in the publications (alongside integral investing or integral investment) indicate the problem. There are not repeatedly used keywords and only Bozesan refers to philanthropy; otherwise keywords such as process optimization, energy consumption, numerical simulation, or stainless steel are given in the texts. Nevertheless, the problem could be solved soon as a book titled Integral Investing authored by Bozesan is supposed to be published by Springer in November 2020 [31].
The question of major trends in the literature on the subjects of impact investing and integral investing may be of interest to researchers in the field as it can help them to expand in a scientific way the boundaries of knowledge in the field. Since the number of publications on the subject of integral investing is very limited it is not possible to identify any trends so far. Moreover, the issues relating to the term impact investing itself indicate that first, basic terminology needs to be established and agreed upon. In this respect the above-mentioned book by Bozesan [31] could help considerably.
As for impact investing, thematic literature published until 2017 was reviewed by Liu [32]. According to this literature review, the academic work in impact investing is of a nascent field of research, in which there is considerable interest and potential. Nevertheless, no substantial core of ideas, theory, or data were published; the academic contributions represent diverse perspectives and approaches and share little common ground. Liu suggests building a core set of ideas, theories, and definitions to support the progressive accumulation of knowledge in the field of impact investing. The question of whether there is some change in the trends in the literature published from 2018 to April 2020 was thus examined within bibliometric analysis in this article. Expert analysis of the titles, keywords, and abstracts was used to answer this question and particular attention was paid to the linkage between impact investing and sustainable social development.
The trend of diverse theoretical approaches and perspectives is apparent also in the texts published after 2017. Among the analyzed publications none represents a theoretical or conceptual work focused on the theoretical framework of impact investing and alongside Liu [32] only Verrinder, Zwane, Nixon, and Vaca [33] explicitly point to this problem. Agrawal and Hockerts [34] claim that impact investments are rapidly growing, however, the research does not keep pace with the practitioners' interest. The rather practical focus of the analyzed publications supports this claim. The publications deal with impact investments in a wide range of fields, such as agriculture, housing, real estate, tourism, marine conservation, or welfare state. Social entrepreneurship is another frequently mentioned area. Terms sustainability, sustainable business, sustainable development, sustainable investing, social impact, social innovation, social responsible investment, social tech start-ups, fairness, philanthropy, or poverty management appear in the publications frequently. References to the Sustainable Development Goals set by the United Nations [35] are often used when the meaning of impact investments is explained. Despite the persisting lack of theory in the field, it is apparent that in recent years the common understanding of the core ideas and goals of impact investing has been strongly linked to sustainable social development.
