Impact Investing's Emergence: Geneva's Financial Field Case Study

This case study examines the emergence of impact investing in Geneva, Switzerland, highlighting how incumbent market actors from traditional finance drove its development. It argues that the rise of impact investing in Geneva relies on strategies capitalizing on microfinance, a practice characteristic of the city and controlled by its main financial players. The study reconstructs the evolution of impact investing in Geneva over the past two decades, revealing that dominant private banks propelled asset management firms into impact investing through practice relabeling and strategic innovations. The research uses qualitative fieldwork, including interviews and document analysis, to demonstrate that the local rise of impact investing was largely an extension of commercial microfinance, relabeled to mitigate reputational risks and leverage new financial opportunities. This finance-led development raises questions about the true objectives and positioning of impact investing, suggesting it may be a commercial relabeling within traditional financial fields.

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Capitalizing on Capitalism: How Impact Investing in Geneva Emerged among
the Traditional Financial Field
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Capitalizing on Capitalism: How Impact Investing in Geneva Emerged amon
Traditional Financial Field
Noé Kabouche
Work in progress — Please do not share or cite
Abstract
Coined by the Rockefeller Foundation in 2007, impact investing has often been showca
disruptive approach to finance, by its promoters. This paper examines the emergence
investing in Geneva and shows that this discourse can be qualified when it comes to th
conditions of its emergence, as a field. Literature on impact investing emergenc
examined this process under the lens of its intermediary status and its connect
proximate fields, especially the state. But the present case shows a local emergence th
by incumbent market actors from traditional finance. We argue that such an emergenc
strategies capitalizing on microfinance, a characteristic practice of Geneva, controlled
financial actors of the city. Based on qualitative fieldwork consisting of interviews and
analyses, the paper reconstructs the rise and evolution of impact investing in Geneva o
two decades, showing that dominant private banks of Geneva directly or indirectly pro
of the assetmanagementfirmspositionedtodayin impactinvesting,relyingon various
mechanisms, such as practice relabeling, and strategic innovations.

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1. Introduction
Sir Ronald Cohen, one of the pivotal actors in the worldwide development of impact in
head of the Global Social Impact Investment Steering Group (GSG), named his main b
impact finance as follows: “Impact: Reshaping Capitalism to Drive Real Change” (Cohe
Alongside other promoters of this relatively new form of sustainable finance (see for in
Bugg-Levine and Emerson 2011; Emerson 2018), he suggests that impact invest
capitalism’s shortcomings regarding today’s social and environmental challenges.
Global Impact Investing Network (GIIN), the main organization promoting and s
impact investing around the world, states that this practice is “unashamedly ambitious
at becoming the “normal way of doing things”1. These phrases picture impact investing as
disruptive practice, whose role is to revolutionize the way financial activities are being
while replacing the old ways of capitalism. But how does such a promise materialize w
to impact investing’s implementation in specific places?
Part of the broader category of “sustainable finance”, which refers to investmen
account social and environmental issues (including socially responsible investments (S
2010), ESG (environmental, social and governance) criteria guiding investing (Leins 2
shareholder activism (Soule 2009; Waeger and Mena 2019)), the term “impact
coined at a event organized by the Rockefeller Foundation in 2007. Its goal wa
investment strategy that would reportedly stand out from the other sustainable financ
by putting the emphasis on an active investing endeavor that “aims to generate a mea
and environmental impact alongside a financial return”. To develop and promote impa
the foundation created the GIIN, mentioned above, a network bringing together banks
funds, individual investors and foundations.
1 https://roadmap.thegiin.org

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Several studies have been exploring how impact investment initiatives have been deve
various countries. Some of them show that the “impact investing” label is the result of
effort of market players, public institutions and political actors. In the United Kingdom
impact investing was meant as a welfare policy relying on unclaimed assets used for th
a “social investment bank” (Golka 2019, 2023). In France, it was an asset class’s label
by the state and linked to the “Économie sociale et solidaire”, which refers to economi
which follow specific criteria, such as being useful to society as a whole, and not focus
profit-making (Chiapello and Godefroy 2017). But impact investing is not always the co
of the cooperation of various fields that would result in a state-guaranteed label tied to
political or social vision. In this article, we examine the development of impact investin
Switzerland, and question its relationship to financial and non-financial actors. Throug
we show that impact investing’s strong ambitions towards existing financial markets t
reportedly be “reshaped”, are not pivotal in its emergence. On the contrary, we argue
investing mostly acts as a label used by existing financial actors to categorize their ini
other labels are being jeopardized by global events or when worldwide financial evolu
new ways of conducting financial activities prone to grant strategic advantages on exis
To this end, we consider impact investing in Geneva as an emerging field (Fligstein an
2012) and demonstrate that skilled social incumbent actors from traditional finance of
fashioned its settlements through strategic actions and resource deployment. Hence, w
the local rise of impact investing was largely due to an extension of the previous field o
microfinance in which powerful financial actors of the city played a key role. This filiat
impact finance and microfinance appears as a core characteristic of the Geneva case:
showcased microfinance as an innovative and virtuous form of investment, Geneva’s a
relabeled such activities as “impact investing”, as the new concept offered more flexib

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dismissed reputational risks tied to microfinance crises. These incumbent actors from
finance hence managed to build a specialized sub-field of finance and occupy dominan
in it, by drawing on transnational symbolic resources and local alliances with t
international development, while choosing themselves the structuring conditions of th
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 add
conditions of emergence of impact investing in various places, showing that the case o
features a financial incumbent-driven development, where structuration processes ma
relabeling of and capitalizing on existing activities, here, microfinance. Through the ad
perspective,our studyhighlightsthe interconnectednessof differentsocialspaces,while
emphasizing the crucial role of existing dominant financial actors and structures
investing’s settlement. Second, this analysis fosters questioning on the consequences o
finance-led development. Whereas impact investing is often described as a disru
conducting financial activities, observing this phenomenon as a commercial relabeling
within traditional financial fields begs the question of the movement’s objective and po
This paper is structured as follows. In the next section (2.) we expose our data and me
we present our empirical findings (3.). Finally, we discuss them and conclude on the c
under which financial incumbent-led emergence of impact investing can take place, an
the possible consequences of such developments (4.).
2. Data and methods
Like other transnational phenomena, impact investing is also locally anchored, and stu
local anchoring—here, through the case of Geneva—is crucial to understand its
implementation mechanisms (Attencourt and Siméant 2015). Geneva has a long

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banking history and a highly integrated financial field (Araujo 2020; Mazbouri and Gue
dominated by ancient families and private banks active in wealth management.
known for its philanthropic initiatives, led by foundations and banks (David and Heinig
David, Heiniger, and Bühlmann 2016; David et al. 2016). The case of Geneva, finally, a
perk of being quite suitable to a thorough emergence analysis. The main reason for it
size of its financial ecosystem, due to the hegemony of a few historic families, and a lim
of influent companies. This specific local situation enables us to follow the main individ
designed the field, and hence, offer a detailed analysis of the phenomenon.
To this end, our fieldwork consists of direct and participant observations at eve
sustainable finance, where we first identified and mapped the main actors of the field.
focused on asset management firms specialized in impact investing (n = 8). Moreover,
at other actors in the field: individuals who played a structuring role the configuration
investing field; banks that offer impact investment products, but are not specialized in
surrounding actors, such as associations supporting such initiatives and actors from in
organizations and NGOs. Our main data sources are semi-structured interviews
conducted online and in person, in French or English. Interviews lasted between one a
hours. We interviewed at least one executive for each of the specialized impact compa
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, in
were added along the way, as we learned more about the process of the field
contacted people who had a role in it. We also analyzed the annual reports of the spec
investingassetmanagers,and gatheredothermarketingdocuments.All interviewswere
transcribed, and qualitatively analyzed through the software Atlas-Ti. For this paper’s
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.

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mostly relied on an analysis that focuses on the processes of field creation and consoli
led us to pursue a genealogical approach (Agrikoliansky, Fillieule, and Mayer 2005; Ba
to the field emergence: we went back from the actors present in the field today, to find
the field was created. In the empirical analysis, names of organizations have been cha
interviewees are only mentioned by their institutional affiliation. Only four major indiv
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 a
times. Just focusing on the specialized asset managers (and thus disregarding the trad
and commercial banks that offer impact investing products), one sees that some comp
funded a couple years prior or after 2010, a few more were created later, and two mor
firms active in microfinance, already existed in the early 2000’s. This is a part
observation for the analysis of the emergence of the field: some of the companies actu
the coinage of the very term “impact investment”, in 2007. At the same time, it also sh
many of the firms that constitute the field were created after the term existed. From a
judging from the age of organizations, it thus looks like this field was created partly by
and partly by new actors. But of course, this is a very crude indicator. Through the int
conducted, we identified much more precisely the process of emergence of the field of
investing and of the role of incumbent actors therein. We hence show how impact inve
Geneva settled as a label capitalizing on existing forms of financial activities secured b
actors from the traditional financial field of the city.
In the first empirical section, we will examine the emergence of microfinance in Genev
20th century, a type of investments made in developing countries. We will show that this
was structured as a subfield within the existing financial field and by several of its pow

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The second section will focus on the period running from 2008 to 2014, when the term
investing” was coined by the Rockefeller Foundation. We will study the processes thro
the Geneva impact investment field emerged from the microfinance one, using
diversification strategies relying on both microfinance practices and the new “impact i
concept.
3.1 Before impact: the emergence of a microfinance field among Geneva
finance
Impact investing in Geneva was not generated in a void: it emerged within an
microfinance. To comprehend the emergence of impact investing, one needs to unders
processes that supported the development of microfinance in Geneva. Microfinan
settled within the financial field of Geneva, thanks to the essential support of central in
actors of the local financial center: the private banks.
Although the financial center of Geneva includes several types of institutions (A
Mazbouri and Guex 2010), namely cantonal and major commercial banking firm
characteristic and arguably historically most important feature are the private banks.
dominated the Swiss financial ecosystem of the 19th century (Mazbouri and Guex 2010), especially
in Geneva. Private banks are financial organizations which offer personalized su
clients, traditionally rich families, in asset and wealth management. Unlike other bank
people can become clients of a private bank. These dominant private banks were char
a strong control exerted by what has been called an “aristocratic bourgeoisie”, referri
families which benefited from an ancient reputation, an important involvement in the fi
affairs of the city, and an aristocratic way of life (Cassis 1991). As shown by Araujo an
(2018), these families secured their institutional control throughout the decades—and
contributing to an exceptional stability of their firms’ associates (Fernandez Perez and

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Indeed, in some of these banks, people with the same family name have been in charg
than 200 years, showing that the firms were transferred within the same family, and o
descendants. In short, the financial center of Geneva is profoundly marked by a set of
anchored incumbent actors, historically rooted in the banking landscape, and still acti
Among these incumbents, two institutions specifically played an active role in the deve
sustainable finance, and indirectly, impact investing: Lacour-Deschamps and FAC
D’Alverny - Campoli), a financial firm founded by people linked to both Lacour-Descha
Flury—the other major private bank in Geneva. These organizations possess all
regarding familial longevity mentioned above, provide wealth and asset management s
became major worldwide actors. According to the British Scorpio institute, they have b
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
of the 18th century) and gathers more than 2,500 employees worldwide4. These famous and well-
established groups played a major role in the framing of the sustainable financ
Geneva, by participating in the introduction of a new financial practice: microfinance.
refers to investments made in financial institutions whose role it is to fund und
individuals or micro and small enterprises from the real economy in developing countr
approach targets non-Western institutions and aims at providing “financial inclusion”
or “emerging” markets, while monitoring these investments and measuring their socia
the populations through mixed methods and customized indicators that depend on the
of the investees (Servet 2006). The creation of the first commercial microfinanc
Geneva—Green Lotus, founded in 2001—was the result of the encounter between the U
Nations (UN) and the world of private banking, represented by Lacour-Deschamps and
3 Le Temps, 2016.
4 Lacour-Deschamps’s Website.

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that time, the contribution of private finance to the development field started t
among UN institutions, but was still a very marginal phenomenon. While the official na
the creation of commercial microfinance emphasizes the collaboration between UN ins
and banks, the accounts we got from interviewees from both sides indicate tha
coordinator (from UNCTAD5), called A, played an important role, this person did not have m
institutional backing. Yet this UN official “toured all the banks” in Geneva but
countries such as Luxembourg, to find allies to start a commercial microfinance
developed a tool destined to match investors and projects in need of funding. Accordin
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 compli
with a foundation promoting socially responsible investment since 1997, as state
worked for both FAC and previously Lacour-Deschamps:
“Green Lotus, in its communication, always says: ‘Green Lotus was founded by the United Natio
quite true, but it's because I met A, that we put together this thing. [...] He is the one who starte
then, I did a project for Lacour-Deschamps, and then they didn't want to do it, because I was in c
at the time and it was a bit complicated as a project because there was a lot of shareholder activ
funds. And Lacour-Deschamps was a bit scared and then they said: 'no, this is not for us.'” (Interv
FAC)
After the fund was launched in Luxembourg, a Belgian banker (C), a family member fr
Deschamps (D), and B (who worked at that time for Lacour-Deschamps) funded Green
with the goal of providing management consulting on this fund—it was the beginning o
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
funds, I came up with this idea again and I thought: 'I'm tired of banking'. The banking world, at
time, was not at all conducive to the development of something like I was trying to do. So, I left t
with the blessing of my CEO at the time, I created Green Lotus with D [who is from the Lacour-D
family]. And we embarked on the adventure. And from the start of the creation of the startup, we
management consulting contract [the microfinance fund]. And that's how Green Lotus started. So
2001, here we are, the two of us... I provide the fund management advice and D knew—linked to
5 UNCTAD stands for United Nation Conference on Trade and Development.

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obviously—people who could support us. His father was the founder of [an association su
creations], as you know. And he gave us a lot of support. He really got us started, if you will.” (In
at that time, a Belgian banker)
Thus, two of the partners who launched the first commercial microfinance fund in Gen
from the world of Geneva private banks, and were linked to the private banks through
business ties, and financial resources. To understand the success of this project, it is a
noticing that the private banks—whose actions were crucial in the emergence of Green
enjoyed an apparently natural role in this process, since their tradition of personalized
support and long-term strategies easily matched the expectations of sustainable financ
be part of the explanation of why they (instead of other kinds of financial acto
microfinance (Araujo 2020):
“[We've been interested in impact] since... well, for some time, since [...] we have a philanthropi
that is really very important, so that's something we've always been invested in, and then, throug
history, we've had impact initiatives. We introduced the ESG in 1997, we participated in the crea
Lotus in 2001, so there has always been a part of the company that has been invested in [...] the
should also be at the service of society.” (Responsible for sustainability integration, Lacour-Desch
“Geneva's financial sector is naturally oriented towards the long term and towards a notion of co
It's not every man for himself, trader, but it's rather long term. So, there is a phenomenon of thi
perhaps a little romantic, but afterwards it is up to the academics to validate this, which is somew
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 Genev
to Green Lotus, the case of Harmony involved incumbent actors, as one of its cofounde
related to one of Lacour-Deschamps historical families which run this private b
another microfinance company, AccountFin, was created in Zurich in 2003, with
Geneva too. Although this company is not technically part of the Geneva field of micro
the story of its founding is interesting to consider. According to one of our interviewee
organization was created by a big commercial bank, Credit Suisse, in reaction to the f
Green Lotus:

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“And when they [a wealthy family] heard that Green Lotus was coming they said to Credit Suiss
to do something or we'll leave you and go to Green Lotus. And they created AccountFin because
dare to go head on. Because it's not easy for a big bank, somewhere, to lend to the poorest peo
interest, if it turns out to be bad, not only do they steal from the rich, but they also steal from th
(Interviewee B, FAC)
In all these cases, small companies are created and supported by financial and person
from established banks. These banks refrain from entering this market themselv
probably due to the very small size of this new sector. As an interviewee told us, “a ba
want to wipe the slate clean: it wants to see if it works, and if it does, then they'll get o
the only reason. The reputation risks associated with it also play role, as we see in the
excerpt.
We then observe a striking continuity between this newly generated subfield of microfi
the existing ancient financial field. This new subfield was indeed organized by strong i
actors, namely the private banks, which defined the structures of the field, and acquire
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 200
be reconsidered as part of the broader international context. The rise of impact invest
financial category is of course related to the entrepreneurial work of the Rockefeller F
and the organizations that were then created to promote such activities, which enable
to seize this label and build a local field of impact investment. But another factor is the
political context at the time, marked by the financial crisis of 2007-2008, which profou
the sector. It gave legitimacy to endeavors of sustainable finance and forced financial
regulators into redesigning rules and goals of the financial markets, while imagining n
of finance destined to showcase a more responsible, ethical, or sustainable approach t