Elaborating on a three-month ethnography of an impact investing fund called Impact Equity, this article aims to understand the mechanisms at work in the emergence of the impact investing sector. After presenting the case of Impact Equity (section 1), the article details the norms and devices through which impact investing is constructed in everyday financial work (sections 2 and 3) and investigates how impact investors mobilise moral beliefs and strategic motivations to navigate competing definitions of “social impact” (section 4). In doing so, this article outlines how the construction of the sector has involved the creation of channels enabling capital and “social impact” to circulate between institutional investors, impact investment funds, and “impactful businesses,” and it highlights the historical tensions that this process has involved.

This article considers the construction of the market of Impact Investing – financial investment with the intentional pursuit of “impact” alongside financial return – as one case of the broader turn to Social Finance. Impact Investing is championed by proponents for its ability to provide a sustainable and scalable market-based solution to societal and environmental problems, in contrast to the limited efforts of government and civil society. This article delineates the work of the market maker who motivated the construction of a judgment device to address the issue of quality uncertainty in this new market. I offer a genealogy of this rating system for firms as potential impact investments, showing that it was commissioned by proponents of Impact Investing who, having first engaged in boundary work to distinguish Impact Investing from other spaces of Social Finance, then sought to appeal to traditional investors by mimicking the calculative tools used in traditional capital markets. Yet, the adaptation of a financial rating system to the new field was complicated by the multivocal status of “impact” as a boundary object involving multiple, disparate actors committed to the common project of creating a judgement device for impact investment yet diverging on the question of how impact was to be created by businesses and for whose benefit. The result was a slippage between the conception of impact espoused by the market maker of Impact Investing and the type of impact gauged by the rating system itself, with likely reactive effects for impact investors and investees. I conclude by positing that the development of suitable judgement devices that capture and communicate the impact of socially or environmentally oriented financial activity is one critical yet understudied condition for the ability of social finance markets to achieve their promise.