Last month, leaders at some of the world’s largest companies took the notable step of redefining the purpose of a corporation, adopting a “modern standard” for corporate responsibility that promotes “an economy that serves all Americans.”

The 181 CEOs who signed the statement from Business Roundtable, an association of chief executive officers headed by JPMorgan Chase’s Jamie Dimon, pledged to run their companies “for the benefit of all stakeholders — customers, employees, suppliers, communities, and shareholders.”

The statement marks a notable move away from the adherence to shareholder primacy — the belief that corporations exist principally to serve shareholders — which the group had embraced since at least 1997. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term,” Dimon said in prepared remarks.

That pivot should catch the eye of a growing number of organizations committed to impact investing, the practice of investing in companies, organizations, and funds with the intention of generating not just financial returns, but measurable social and environmental impact as well.

Underlying that philosophy is the belief that private capital is critical to tackling the world’s most pressing environmental, social, and governance (ESG) problems, an ethos echoed in the Business Roundtable statement of purpose, which said, “We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment, and economic opportunity for all.”

That dovetails with views shared at an impact investing panel held earlier this year, part of the 2019 MIT Sloan Investment Conference.

“It’s one of the fastest-growing areas of the investment business,” said panel moderator Liqian Ma, head of impact investing research at global investment firm Cambridge Associates. “The goal is to invest in products and services that serve a need, address real challenges, and also can and deserve to be profitable.”

Read the rest of Tracy Mayor’s article at MIT Sloan News