An increasing number of studies highlight impact investing’s transformative potential to address Grand Challenges. Central to this is the alignment of impact identity - rooted in materiality, additionality, and measurability - with strategy. However, the nexus between identity, strategic choices, and practical frictions remains underexplored. Our research investigates these links through interviews and observations with impact investors, banks, NGOs, social enterprises, and academics. By focusing on practitioners’ practices, we reveal how organizational identity and strategy intersect in impact investing. This study emphasizes the importance of aligning identity and strategy to distinguish impact investing from other sustainable finance approaches and addresses key challenges in achieving this alignment.
