The Holistic Spectrum for Impact Investing

Laura Ortiz Montemayor
12 min readSep 1, 2017


This summer marks the 10th anniversary of the term “Impact Investment”. The Impact Investing sector has evolved in size, depth, data, in terminology, and has examples of impact investments all over the world in several asset classes. But fundamental debates are still on-going regarding the impact metrics & management, common values, definitions and more importantly if we are winning battles but losing the war. The most common discussions gather interest around if impact can produce market rate returns or not, if it should, or if impact is not binary at all.

Over the past 3 years SVX.MX has trained over 150 investors in Mexico on impact investing, partnering with AMEXCAP and Sonen Capital. We have adapted and co-created content for these trainings to make it as engaging and student-friendly as possible. A definite climax point during our courses has been the Holistic Impact Investment Spectrum. This tool helps to transform investors understanding of what qualifies for good, better and best impact based on outcomes instead of returns.

This spectrum serves as a tool for impact investments’ evolution based on universal values and it does not replace the traditional spectrum but enriches it and gives the “impact” values a clear direction to be more understandable for everyone.

The Impact Sector from established to evolving

Amit Bouri, the CEO of the Global Impact Investing Network wrote in a very inclusive article an invitation to the Impact sector to be welcoming to bigger capital in an effort to solve the magnitude of the problems we face.

“This isn’t easy work, changing mindsets, challenging assumptions and values about capital and the way the investment community works. Yet, as Einstein once said, “A new type of thinking is required if mankind is to survive and move toward higher levels.”” Amit Bouri

So precisely because we need to rethink the way we use capital, lets propose an evolution: a complementary Spectrum to accompany the usual impact spectrum. The usual impact spectrum is a spectrum from the point of view of financial returns. It helps us illustrate and enunciate the layers of opportunity that come between philanthropy and “Business as Usual”. While it is very helpful and used across the world, it only provides the financial return perspective, not the impact one.

Impact Investing Spectrum by Sonen Capital

How can we explain Impact Investment beyond the focus on financial returns?

What if we were to explain Impact investment as the spectrum of commitment to positive outcomes, instead of the spectrum of financial return expectations?

50 Shades of Impact

If we were to explain commitment to impactful outcomes in a spectrum that takes into account that ALL investments create impact (intentionally and accidentally), and that these impacts are not just absolutely bad or absolutely good (black or white) but many shades of grey in between: some are mostly positive impacts vs mostly negative impacts. How do we net out how much positive impact is needed to outpace the negative impacts of a company or sector? Will we keep going with development outputs (number of jobs, GDP) and growth as an end goal, or can we change course towards wellbeing and balance, which are not coherent with endless growth?

For example, how much “good” does a food company that profits from selling junk food need to do to offset the negative health outcomes associated with its core business? How much is the positive impact of a “financial inclusion” company that charges over four thousand percent in interest rate and how much are the negative outcomes of such a company?

Here lies the fundamentally philosophical question of what impact investment means by attempting to help make a better world for everyone. What is the maximum expression of all that is good in the world? Could it be life? What about the expression of all that is negative? Could it be death? Which investments are conducive to life and which are conducive to death? What about all the layers in between?

If we want our impact investment strategies to translate in real long term results we need to start with coherence to universal values all throughout our strategy and subsequent actions. Coherence can translate into trust of the impact concept by more stakeholders that can ultimately lead to the most impactful results for all.

Universal Values

2 months ago I wrote our Manifesto for impact, claiming for outcomes instead of outputs thinking we aren’t here to make the world better. We are here to make the world the best imaginable place for all. So what investment spectrum do we need to get to best for all?

From Thinking Bigger to thinking Better

According to Google, the definition of Holistic is:

ho·lis·tic — hōˈlistik/adjective

  1. characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole.

So here is our proposal for an evolution in impact investment narrative: The new Holistic Impact Investment Spectrum based on outcomes of benefit or damage to the world and applying systems thinking to impact investments:


We start by dividing the spectrum in 2 halves. The left half subtracts value from the world while the right half adds value to the world. There is a bridge from one half to the other. The right half has positive impact in every layer but in different degrees of benefit to the world.

Destructive: These are all investments that create conditions for death which include: all government budgets destined to war, companies that produce weapons, money managed for cartels and human trafficking. According to a portfolio of stocks of such companies named “Guns, guards and gates” this asset class is underperforming the market by more than 15% basis points this year.

Extractive: This is by far the largest in size of the classifications of the spectrum. By extractive we mean unsustainable investments that are wealth-depleting: they can create short-term profit and benefit through the extraction of resources from the system but ultimately deplete rather than grow the overall wealth of a system. Naturally most people think of oil & gas and mining immediately after hearing “extractive”; but this can also include junk food companies, fast fashion companies, some banks, some manufacturing companies, some retail companies, some chemical companies, most construction companies, some forms of industrial agriculture, slaughterhouses, and any company that has no regard or responsibility for the negative externalities it causes. Indeed they add jobs to the economy, but they also produce large amounts of poorly-managed waste, and not all companies have working conditions that allow for wellbeing all throughout their supply chains. As long as the net effect of their business is larger on the extraction than on the value it creates for the world, the net effect is extractive.

These businesses treat nature as a warehouse for raw materials and even sometimes puts its workers or communities at risk. Extractive investments are degenerative in nature. An index or ETF to exemplify this industry can be the SPDR S&P Oil & Gas Exploration & Production ETF which in the past 3 years has lost -59.2% of its value.

As you can infer the extractive category is not synonymous with outperforming returns. Returns are only temporary conditions of a specific unit in the market in a specific period of time; there are no standard returns in any asset class. The average VC fund, breaks even or loses money. You don’t have to believe me, you can believe Harvard and Kauffman Foundation.

Responsible: There are plenty of indexes and certifications for measuring responsibility and ethical behavior in companies and ESG screens and practices that reflect: Environmental Social Governance. The degree of responsibility that each certification dictates varies greatly. We can be certain that companies with these labels and certifications are taking care of doing less harm in one aspect or another, but we cannot be certain that this category means these companies are benevolent to the world around them. For example some companies can show compliance to gender equity quotas in boards or top level management but might still have salary disparity among female and male workers. Some “responsible” indexes are more questionable than others. In Mexican magazine rankings and standards, the companies that are at the top of the responsibility rankings are responsible for polluting the country massively, have the highest water footprint, sell the sugared products that make Mexico rank #1 in child obesity, have current corruption scandals with the government, among other debatable behavior. From the outside, it looks like these companies could be confusing charitable giving and volunteer programs with the responsibility of their core business’s externalities. It could very well be that it is an index of the companies that are trying the hardest to be responsible. Who knows for sure.

Sustainable: With a higher degree of commitment than Responsible companies, we define sustainable investing as fully integrating environmental, social and governance factors — ESG factors — into investment management. Strategic sustainable investing (SSI) is an investment strategy that recognizes and rewards leading companies that are moving society towards sustainability. SSI relies on a consensus-based scientific definition of sustainability. It was developed by researchers at the Blekinge Institute of Technology in Sweden. According to the study From Stockholder to Stakeholder: How Sustainability can Drive Financial Outperformance from Arabesque Partners and Oxford University, Sustainable investing outperforms regular investing in the long run. Examples of this kind of investment are Green Bonds, among many others that commit to cutting carbon emissions or reducing the water footprint of their companies.


Impact Venture or Social Enterprise: These are companies that are intentionally solving one or more social and environmental problems. According to Wikipedia: A social enterprise is an organization that applies commercial strategies to improve human and environmental well-being — this may include generating social impact alongside profits for external shareholders. Some of our favorite examples include: Someone Somewhere a Mexican brand that empowers women artisans through education & incorporation of their textiles in fashion items, Hipocampus community centers of learning for young children that started in India and scaled to Mexico, Algramo from Chile which provides multiple solutions to empower mom & pop stores and decrease the poverty tax and packaging pollution in low-income communities. Social Enterprise is the most well-known category of Impact Investments. It is composed of thousands of companies, funds and organizations that serve underserved markets, and usually look for market based solutions to solve the worlds’ intractable problems. Some of these companies have measurable impact with globally common metrics: such as B Corporation, IRIS among others.

Non-Extractive Finance or Transformative Investments: This category is based on the 3 principles of non-extractive finance created and promoted by Transform Finance. Transform Finance, an organization co-founded by Morgan Simon & Andrea Armeni , set out to analyze what seems to have worked — and what hasn’t — in the first wave of impact investing. They distilled that analysis into three overarching principles:

  1. Communities should be engaged in the design, governance, and ownership of projects that affect them.
  2. Investments should add, rather than extract, value to the communities where they are deployed.
  3. Risks and returns need to be fairly balanced between investors, entrepreneurs, and communities.
Impact is not only in the WHAT you invest in but also in the HOW you invest in it.

These principles can be summed up in the phrase: “nothing for me without me”. These investments are rooted in social justice, and they offer a roadmap for impact investors who aim to transform rather than improve. It means giving real agency to and drawing leadership from the affected communities. It also includes models of descentralized ownership now popularized by movements of Platform Cooperativism, blockchain and other models that rather than aim to concentrate the wealth created, aim to distribute it.

The origin of the word company comes from the latin of sharing bread; Non-extractive finance goes back to that original meaning and brings it to our century. To learn more about this world-changing approach we recommend reading the book: Real Impact by Morgan Simon — The New Economics of Social Change and the provocative article that started the Zebra Movement and challenges ideas of scale, exponential growth and Unicorns: Zebras fix what unicorns Break. Some examples of Non-extractive finance can be seen in The Working World Fund who pioneered principle #2, Grupo Paisano from Mexico, and Impak Finance + Impak Coin in Canada- the first legal cryptocurrency for impact, Sardex, the revolution of local value creation that empowers communities and started during a crisis in Italy, among others that use alternative financial structures to include more stakeholders (than just the investor + the entrepreneur) into the investments.

Regenerative: Regenerative Capitalism seeks balance and wellbeing instead of indefinite growth, it involves Systems Thinking and views wealth holistically.

According to the NEXUS Lab on Regenerative Culture: Regenerative culture is based on an understanding that humanity and nature are inextricably linked and seeks to support alignment of financial and economic systems with earth’s healthy systems.

Through the study of the unifying principles of regenerative systems, a new picture of humanity’s place in the world emerges: Regenerative thinking reorients human beings as a restorative, beneficial and healing force for all of humanity and the planet as a whole. This is a re-identification of humanity as the planet’s “immune system” rather than its self-destructive cancer.

As you can infer, understanding this kind of investments involves shifting paradigms, and evolving some concepts such as supply chains to supply webs. As Liora Adler, wisely states: “As the definition wealth and capital is expanded to include more than money can measure, value becomes more visible. With a holistic look at the economy, through asset-based planning and quality community conversations, much more wisdom can be harnessed.

Connection is the source of value. Poverty is a result of disconnection, from spirit, body, emotion, family, and community, and especially disconnection from the earth. Through wise use of technology, people are moving from fragmentation to interrelatedness. (what is also called Interdependence) Through meaningful exchange of words and value people find connection.

This is a time of momentous transformation of the very systems that we depend on to sustain life. Natural, economic, and social systems are morphing. Individuals are no longer having their needs met by the debt-based currency and predatory economy that continues to extract value from communities.”

Compilation by NEXUS Lab on Regenerative Culture

Some examples of Regenerative Capitalism are Terra Genesis, CyclEffect, many forms of permaculture, Alternare in Mexico, Savory Institute, the Blue Economy by Gunter Pauli, Ejido Verde, Thimble Island Ocean Farm, most forms of circular economy, some forms of Green infrastructure and Vertical forests by Stefano Boeri.

“Nature is a totally efficient, self-regenerating system. IF we discover the laws that govern this system and live synergistically within them, humankind will be a success.” Buckminster Fuller

To learn more about this exciting new frontier for investments we recommend reading Regenerative Capitalism by John Fullerton, Doughnut Economics by Kate Raworth, watching the beautiful documentary: Demain.

In conclusion this spectrum takes a holistic view of whole value rather than just shades of financial returns.

  • We need to evolve the impact paradigm starting with ourselves.

Smart investors know how to take advantages of opportunities, usually from an ego-centric point of view. Intelligence is measured by the ability of solving problems, so we assume intelligent investors are natural problem solvers and think longer term than smart people. The wise investor is enlightened by a higher degree of consciousness and by an eco-centric point of view that allows to see beyond themselves and beyond shortermistic constraints. They can see the System and make their investment decisions accordingly.

What Investor do you want to be?

  1. the SMART investor that invests in future trends?
  2. the INTELLIGENT investor that invests for impact?
  3. the WISE investor that invests to transform systems through Regenerative principles?

The great news is that we can be all of the above! — -only when we invest in impact holistically with Regeneration as the goal.

We have plenty of work to do; let’s get to it!

We have been honored to work with some of these transformative people & organizations mentioned here and know there is much more to learn from them.

In SVX Mexico we would love to partner with you to publish a study to validate this new spectrum. If you are interested in collaborating or have thoughts to share please join us here.

We thank everyone that is part of our learning journey, our friends, our board, our clients, the people that have believed in us, including our mentors from SVX Canada, MaRS, B Corporation, Transform Finance, NEXUS Lab on Regenerative Culture, ANDE, Sonen Capital, John Kohler, and many more.

We are grateful to the work of people that have inspired us: Morgan Simon Andrea Armeni Anand Giridharadas, Jed Emerson, Ross Baird, Kevindoylejones, Martin Montero, Jennifer, Mara, Astrid & Aniyia, Chris Lindstrom, Kate Raworth, Allan Savory, John Fullerton, Donella Meadows, Buckminster Fuller.

Biggest thank you to the SVX México Team: Hector Reyes Flores, Stevie Smyth Valdez, Daniel Apiquian SVX Mexico + our mentors from the SVX Canada team: Adam Spence, Marie Ang, we love you!



Laura Ortiz Montemayor

My mission is to ensure capital serves life. Impact investment advocate in Mx and systems entrepreneur founder of working for a Regenerative Economy.