This section will review the literature focusing on private investors’ motivations to invest in social impact investments (as opposed to standard investments). Impact investments are characterised by their intention to generate social impact alongside achieving a financial return. Many Nordic investors direct their capital toward sustainable development in areas of renewable energy, healthcare, and education; however, only a few investors use the SDGs to develop impact investment strategies (The One Initiative 2019).

According to a study focusing on investors in the Nordic countries, 83% expect their impact portfolio to deliver at or above market rate of return (The One Initiative 2019). The study also found that the majority of investors still place financial return as a higher priority than impact, with 59% claiming to invest for financial return only or financial return first, while 41% invest for impact only or impact first. An important point is that impact-driven institutional investors are motivated by the public agenda and client demands. This illustrates the previously mentioned enabler concerning timing as the impact start-up can present solutions to specific societal challenges. However, many impact-driven investors still see impact investment as a complementary strategy. 

In 2019 in Finland, 4% of investments by angel investors were impact investments. Although a specific number regarding social impact investments is not available, the number has increased by two percentage points since 2013 (FIBAN 2022). In 2019, 41% of investors believed that impact investing may increase profits, and 40% of investors took it into consideration when making decisions on investments. Despite the positive view, most investors were not aware of what kind of concrete effects their investments had. Although some measurement systems have been developed in recent years, there remains a lack of indicators for measuring impact. Some impact investors, like the development financier Finnfund, have created their own results-measuring system (Aro 2020). 

While the Swedish financial market has committed to goals related to the Paris climate agreement and the green transition, work for social impact investment and social sustainability goals has been lagging behind by several years. However, new co-creation projects between the public sector, businesses, and innovators show that interest is increasing. The possibility to use private capital for social investments and the social responsibility related to the green transition are two trends that seem to be encouraging greater use of private capital towards preventive work that solves social issues.

In the Swedish context, the privately financed outcome fund launched by Leksell Social Venture in 2021 is likely to motivate the private market to provide capital with demands on the positive social effects. SEB bank has developed a customer offer of loans with sustainability goals that also link to several social aims. Trill Impact and Norrsken have also made social investments with private capital, in addition to Nordea Liv och Pension, a life insurance company which invested SEK 1 billion in a recently established Nordea fund (the Global Impact Fund) which focuses on global social impact investments (Nachemson-Ekwall 2021). 

Another important factor that can motivate private investors to invest more in impact is when they participate in a network. Several impact companies are part of a private portfolio which also influence their investment decisions. In a Norwegian survey, 55 % (66 participants) answered that they are part of a network with others and may therefore be affiliated with these companies (Eimhjemmen and Loga 2016). Tharald Nustad from Nordic impact and Katapult group in Norway has expressed that many investors do not realise the possibility to generate profit while also focusing on problem-solving, which may be why investments remain limited (The One Initiative 2019). 

Measuring impact can be a resource intensive task, however, it is a key component that helps attracting investors. An important finding from a survey conducted among 84 Nordic institutional and private investors shows that 92% find that impact investment is a good way to meet social goals, but there was still doubt regarding past performance of impact investments. This underlines the need to ensure a simple way to illustrate the gained social impact to convince investors that their investments add to the general welfare of society along with a financial return (The One Initiative 2019).