Investing for Impact: Issues and Opportunities for Social Finance in Canada

This paper argues that several factors have contributed to the lack of development of social finance in Canada, and in particular the intermediaries that connect the demand and supply aspects of this market. Social investors are not able to calibrate risk and opportunity adequately, contributing to the paucity in the range of financial instruments and intentional flow of finance to this sector. In essence there is an information asymmetry problem in the social capital market that constricts the supply of capital. A supply-side analysis of social finance is a necessary complement to demand-side analysis if deliberate investment to realize social, environmental, and financial returns is to occur. Taken even further, the supply-side perspective could in fact catalyze new instruments for raising capital with which to address society’s most pressing issues. The article draws on a series of semi-structured interviews with leading financial and social finance experts in Canada.





Carleton Centre for Community Innovation


Montreal, Canada


Karim Harji, Tessa Hebb


May 15, 2010

Media Type:



Impact Investing, Responsible Investing