Impact Investing in the Renewable Energy Sector: Stakeholder Salience, Ethical Sensemaking, Institutional Logics, and Identity

Abstract

This thesis aims to achieve an enhanced understanding of the complex impact investing decision making process drawing on stakeholder management theory, ethical sensemaking, and institutional logics, by exploring impact investing decision making within the renewable energy sector. Multiple motives and objectives of impact investing decision-makers, individual factors, institutional influences, and the various stakeholders’ interactions are investigated, which shape the impact investing decision making process and help the individuals and organisations to achieve a more stable identity. Multiple contributions are made based on conceptual and empirical analysis. First, impact investing is conceptualised using an extension of the stakeholder management theory and the stakeholder salience framework from the perspective of proximity and value creation for a broader set of stakeholder groups. Further to this academic definition of impact investing, a behavioural perspective is provided to examine how investors navigate and shape their formal and informal institutional contexts and what motivates them to do so through ethical sensemaking. To this end, ethical sensemaking is used to understand the underlying motivations of impact investing and the actual sensemaking processes during actors’ decision making when facing ethical tensions. Then an institutional logics perspective is used to offer a deeper understanding of the hybridity of blended institutional logics, legitimacy, and institutional work by which individuals, groups, and organisations evaluate and organise their everyday activities. Finally, this thesis develops the concept of identity through a single case study of a renewable energy social enterprise, by contextualising the freedom achieved for stakeholder groups through identity work combining personal, relational, and collective identities. This study contributes to the ecological focused impact investing literature by offering an overview of the development of the field and a focus on some of the key theoretical anchors upon which the empirical examinations are built. The empirical context is set in Mainland China to shed light on the issues concerning impact investing decision-makers in the face of complex situations and uncertainties within a single and under-researched social-economic environment. Drawing on interviews with impact investing decision-makers in the renewable energy sector, official government documents, media reports, and other secondary sources, this thesis extends multiple theories to understand impact investing decision making with an abductive approach. This study contributes to the academic discourse on impact investing decision making in sustainable energy development, as well as drawing implications for practitioners and policymakers in this field.