Calvert Impact’s market-shaping strategy for the future of impact

Despite our deep national divisions, most Americans agree on one point: the economy isn’t working for enough people. There are many reasons why, but one core cause is unequal access to investment capital. And that won’t change until we shape capital markets more intentionally.

Access to capital is the backbone of wealth creation in America. Buying a home, starting a business, purchasing land: these are the opportunities that build intergenerational wealth. But they all require financing. And while capital markets serve some Americans well, they leave many others behind.

If you have a strong credit score, steady income, and savings for a down payment, lenders will compete to give you a mortgage. If you contribute to an employer retirement plan, tax incentives and compound interest will help you retire comfortably. Entrepreneurs with the right networks and proximity to capital can raise investment to grow their business.

But if you’re outside those circles—if you lack savings, don’t have access to a retirement plan, or are building a business to reach hard-to-serve communities—you’re often shut out. The financial system is stacked in favor of people and communities who already have resources. It’s not just unfair—it’s inefficient, and it undermines our shared prosperity and national cohesion.

Impact investing was created to reach those outside of these circles, to ensure investment flows to people and places overlooked or deliberately ignored by capital markets. Over the past 20 years, impact investing has moved from a crazy idea to a curiosity to something closer to commonplace, with impact investing departments at every major Wall Street bank and a (under-estimated) total market of $1.571 trillion. 

But while the impact investing industry has had some great successes and helped change the conversation around the role investment capital can play in creating a better world, we haven’t done enough. Our work is not delivering results at the speed our local, national, and global conditions require. If we want different results, we need to take a different approach and we need to take it now.

Impact investors need to become something more: capital market shapers.

We need to move from doing deals to making markets; from building funds to building market shaping institutions that don’t just invest in underserved communities but are committed to shaping how capital flows more freely to them.

Capital markets will not solve social and environmental challenges on their own; they need to be directed deliberately. Picture investments within the global financial markets like a river running through a valley. Capital flows end up in pools where there is the least resistance downstream – large, established companies; big asset managers; familiar financial products.

This is the result of rational investment decisions – these pools are where we have the best data, the longest track records, the deepest relationships, and the lowest transaction costs. But this natural capital market behavior also fuels the status quo of wealth concentrating in the hands of too few and reinforces practices that endanger the planet.

What’s Blocking the Flow?

If we want the river to reach places where it doesn’t easily flow, we have to dig new trenches. We need to address the reasons why capital doesn’t reach high-impact opportunities that the market tends to ignore:

1. Size – Financial firms earn more from big deals. Smaller investments carry the same legal and operational costs but generate lower returns, so they’re often ignored.
2. Data gaps – Investors depend on historical data to gauge risk. If there is not robust market data, investments get priced prohibitively—or don’t happen at all.
3. One-track thinking – Some opportunities need more than money. They need policy change, technical assistance, or ecosystem support. Traditional investors aren’t set up to provide those.
4. The “wrong pocket” problem – Sometimes the financial benefits of an investment—like preventive health care or early childhood education—accrue to someone other than the investor. That disconnect makes it hard to finance what works.
5. Broken policies – Outdated regulations can discourage investment, even when opportunities exist. For example, it can take a decade to renew a license for hydroelectric upgrades—longer than most investors are willing to wait.

What we must do differently

To break or work around these barriers, we can’t just fund deals—we need to change the landscape. We must bring together investors, philanthropists, government leaders, and community partners to address these specific barriers to capital flow. Effective capital market shapers deliberately cultivate the skills needed to shape markets, including:

• Nimbleness – embrace and navigate complexity or unchartered waters by creating a business model that targets reasonable returns rather than relentless profit maximization.
• Aggregation – shift our focus from bespoke deals and funds to aggregating and standardizing assets to enable them to reach sufficient scale to be served by the mainstream capital markets.
• Market leadership – take early risks, often with public or philanthropic support, to prove what’s possible and generate the track record that can pave the way for future investment. Advocate for supportive policies that lead to greater outcomes.

Collective challenges, collective solutions

The need and opportunity for capital market shaping has become increasingly clear through our work at Calvert Impact. We’ve routinely bumped up against the limitations of our existing products and then built out new capacity to meet a defined market need. With partners, we created an asset-backed, investment grade rated retail product to fund building decarbonization, with an ultimate goal of making the sustainable choice the default choice for building developers. We addressed the limitations of community lender balance sheets with new liquidity solutions for small businesses during the pandemic. And we built a market-making strategy to leverage a once-in-a-lifetime federal investment in clean energy adoption.

We know there is so much more to do. In our cross-sector and global work, we see market failures and challenges in so many areas of our economy that require holistic solutions to deliver real results. We see opportunity for robust intermediation to expand shared ownership investment models; we see additional needs to unlock capital for community banks and lenders; we see opportunity to create the conditions in which capital can flow to providers offering affordable, high-quality childcare.

That is why, as we craft our 2026-2028 strategy, we are shifting our strategic focus and operations to become the most effective capital markets shaper we can be. In addition to financial structuring and product development, we will continue adding more tools to our toolbox incorporating impact strategy and supportive services to address challenged markets in sectors and geographies both new and familiar. We recognize that not all market failures can be fixed with finance, so we will focus where access to credit and capital can be a driving force to change the market dynamic and where our experience and networks position us to lead.

We see momentum building for this work and look forward to joining others in the industry who are working in similar ways.

This is bigger than any one organization and is our collective calling over the next decade: to create and back institutions that have the intentionality and flexibility to forge capital markets that can better share our prosperity.

New trenches, new tranches

Capital market shaping requires more than one-off initiatives targeting narrow causes. Without dedicated organizations focused on shaping how and where capital flows, we’ll keep seeing the same patterns repeat—capital concentrating where it’s easiest, not where it’s most needed, exacerbating inequality and alienation.

Impact investing was named 18 years ago, but the movements’ roots run deeper, from investors protesting war and apartheid in the ‘60s and ‘70s, even to Quakers and Methodists refusing to support the slave trade in the 17^th and 18^th centuries. Our industry is built upon the work of passionate, dedicated, bold thinkers who were committed to creating a more just and prosperous world and we must continue in that tradition.

Why this call to action now? Simply put, it’s needed urgently. We know any path forward to preserve democracy and unity requires us to build a more inclusive economy. One that provides opportunity and allows people to live with dignity. That will not happen unless we take bold and deliberate action to forge more inclusive capital markets now.

Building capital market shaping institutions will take time, resources, and resolve. And it will take deep partnership, intentional collaboration across and outside of the industry. But the foundation is already there. Let’s take the next step—together—to build capital markets that truly work for all. The future of our economy and democracy depends on it.

Jenn Pryce is President and CEO of Calvert Impact, a global nonprofit investment firm.