This article examines how public policy can and does play a role in enabling impact investing by U.S. institutional asset owners. We outline how government often plays a key role as underwriter, co-investor, regulator, procurer of goods and services, or provider of subsidies and technical assistance, thus enabling intentional investment for social and environmental benefits by asset owners. The article focuses on how policy intersects with the specific legal requirements and a distinct investment culture that often constrain the ability of institutions to invest with impact. These barriers must be taken into account for the institutional role in impact investing to grow beyond the current limited activity. Careful coordination between policymakers and institutional investors will be essential in building private investment markets that deliver positive social impact. We concentrate on more narrowly construed impact investment policies. Examples include geographically targeted economic development, and energy-efficient real estate investments.
