How can we best understand the evaluation of social impact and financial return in environmental and social impact investing? An exploration of common perspectives of Development Finance Institutions (DFIs) and Vanilla smallholder farmers in Mexico.

Shankland, Stephanie (2023) How can we best understand the evaluation of social impact and financial return in environmental and social impact investing? An exploration of common perspectives of Development Finance Institutions (DFIs) and Vanilla smallholder farmers in Mexico. Doctoral thesis, University of East Anglia.

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Abstract

How do development finance institutions (DFIs) and vanilla smallholder farmers in Mexico understand social impact in impact investing?

Impact investing, worth $1.16 trillion in 2021 (Hand et al., 2022), is a promising way of using private capital in development. Impact investments are channelled through development finance institutions (DFIs) who deliver overseas development assistance (ODA) to developing countries. Impact investing in development, however, has been critiqued as indicative of the financialisaton of development, whereby financiers gain control over development policy.

In this research I identify a gap in the current conceptualisation of impact within impact investment. It is yet unresolved how to best combine the linear logic that underpins financial accounting with a multi-dimensional logic to capture social results that are not linear. To address this gap, I explore the way blended social, environmental and economic impact is measured in DFIs, using the theoretical perspectives of Jürgen Habermas and Max Weber on rational capitalism. The research looks at how DFI measurement frameworks are constructed through a synthesis of 103 evaluation framework documents from DFIs, highlighting areas of harmonisation and showing gaps in developmental evaluation approaches. It is combined with a thematic analysis of 18 semi-structured interviews with DFI experts and farmers at the country-level in Mexico. The interviews adopted the vignette technique (using hypothetical investment cases) which enabled questions on how impact is measured to be asked of both smallholder vanilla farmers in Veracruz, Mexico and managers at DFIs.

The findings suggest that blended value, understood as environmental and social returns, occurs within business and investment ecosystems. In these ecosystems, impact risk (the risk of the intended impact not taking place as planned) plays a key role. This research reveals that both financial and impact risk feed into decision-making and impact tracking. In this research I suggest that the management of this risk requires closer cooperation with stakeholders, which occurs in some of the institutions, through technical assistance. I propose that future research should therefore explicitly consider the role of impact risk in conceptualisations of blended value in impact investing.

Item Type:	Thesis (Doctoral)
Faculty \ School:	Faculty of Social Sciences > School of Global Development (formerly School of International Development)
Depositing User:	Chris White
Date Deposited:	10 Apr 2025 08:21
Last Modified:	10 Apr 2025 08:21
URI:	https://ueaeprints.uea.ac.uk/id/eprint/99006
DOI:

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