March 12, 2025
Inside the Mind of Impact Investors: Behavioural Insights and Decision Dynamics
What does it mean to say that you are an “impact investor?” How do impact investors behave differently than traditional investors in the private equity market? In Canada, there is limited empirical research examining the specific decision-making behaviors of impact investors.
We collaborated with Impact United and Spring in a study aiming to shed light on these questions and explore the motivations, priorities, and decision-making processes of impact investors. The research draws on in-depth interviews with 22 Canadian investors, conducted by students in the UVic MBA in Sustainable Innovation, combined with a unique dataset from real investment decisions made by 113 impact investors during a series of impact investor challenges led by Spring.
Basma Majerbi
Research Lead & Writing
Sam Treacy
Analysis, Visualization & Writing
Watch the Webinar
Key Insights
- No One-Size-Fits-All Approach: Impact investors in Canada have diverse priorities—36% are finance-first, 18% are impact-first, 21% make aligned decisions when impact and returns are equally ranked, and 25% consider other factors beyond financial return and impact. This variation makes decision-making complex and context-dependent.
Impact Investor Priorities
- Balancing Impact and Returns: Impact investors in Canada balance societal impact with financial returns, but there’s no consensus on whether trade-offs between the two should exist.
- Redefining Investment Behavior: Impact investors prioritize socially beneficial projects but often struggle to maximize impact due to imperfect information and perceived risks.
- Complex Due Diligence: Impact due diligence is difficult, with limited resources and skills in measuring and managing impact, often leading investors to prioritize higher financial returns over larger, riskier impacts.
- Risk Tolerance Variations: Some investors (e.g., foundations, family offices) are more flexible with risk when investments align with their impact goals, while others (e.g., private funds, angel investors) manage risk more conservatively.
- Seeing the Bigger Picture: Many impact investors take a long-term view, recognizing that social impact requires time to evolve into financial returns.
- The Many Forces Behind Decisions: Investor decisions are shaped by a range of factors—such as financial goals, trust in founders, deal specifics, and peer influence—indicating diverse motivations and approaches in the impact investing world.
