Building institutional legitimacy in impact investing: Strategies and gaps in financial communication and discourse

Othmar M. Lehner, Theresia Harrer, Madeleine Quast

Research output: Contribution to journalArticlepeer-review

36 Citations (Scopus)


Purpose–Impact investing denominates an investment logic that combines social and environmental goals,financial returns as well as personal values. The purpose of this paper is to consider the concept of legitimacyto be an appropriate way to understand how actors in the impact investing market influence discourse inorder to overcome the inherent liability of newness–based on hybrid institutional logics–through theirfinancial and non-financial communication.Design/methodology/approach–Based on two theoretically defined sets of codes, a thematic discourseanalysis is conducted by analysing meaningful units derived from documents produced by case-selected actorsin the impact investing industry, which are then categorised into rhetorical strategies for legitimacy building.Findings–The paper finds that actors use diverse legitimisation strategies based on their relativepositioning in the impact investing market. These strategies determine the actors’main discursive foci and, inturn, are affected by the overall organisational activities, governance and mission. This study proposes anddiscusses eight legitimacy creating strategies of relevant archetypes of impact investing actors in theirfinancial and non-financial communication. Following these interconnected discursive engagements, acommunication gap can be demonstrated between investors, intermediaries and social entrepreneurs.Originality/value–Such discursive engagement gaps can provide a theoretical lens to explain the almostnon-functional market and, as practical implications, show the need for convergence and harmonisation infinancial and non-financial reports and communiques. This research further contributes to theory byproviding insights into the discursive creation of legitimacy, and by promoting a better understanding of theemerging field of impact investing.
Original languageEnglish
Pages (from-to)416-438
Number of pages23
JournalJournal of Applied Accounting Research
Issue number4
Publication statusPublished - 9 Dec 2019


  • Communication
  • Discourse
  • Legitimacy
  • Impact investing
  • Impact reporting


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