Legitimacy and Discourse in Impact Investing: Searching for the Holy Grail

Impact investing denominates an investment logic that combines social and environmental goals, financial returns as well as personal values. In this paper, we consider the concept of legitimacy to be an appropriate way for actors in the impact investing market to overcome the inherent liability of newness based on their hybrid institutional logics. Based on two theoretically defined sets of codes, a thematic discourse analysis is conducted by analysing meaningful units derived from documents produced by case-selected actors in the impact investing industry, which we then categorise into rhetorical strategies for legitimacy-building. We find that actors use diverse legitimation strategies based on their positioning in the impact investing market. These strategies determine the actors’ main discursive foci and, in turn, are affected by the overall organisational activities and mission. Following these interconnected discursive engagements, a communication gap can be demonstrated between investors, intermediaries and social entrepreneurs. Such discursive engagement gaps can explain the almost non-functional market and, as practical implications, show the need for convergence and harmonisation. We further contribute to theory by providing insights into the discursive creation of legitimacy in the field of impact investing.