Bridging Gaps and Investing in Impact: Rachida Justo and the Impact Bridge-IE Chair

The IE Foundation stands as a cornerstone of innovation and societal impact, driving initiatives that bridge academic research and practical application. A shining example of this ground-breaking research supported by IE Foundation is the Impact Bridge-IE Chair, directed by the inspiring Rachida Justo. Her journey has been marked by a relentless pursuit of social entrepreneurship and impact investing. From the early days when her colleagues jestingly called her a specialist in "lost causes," Justo has transformed these so-called lost causes into powerful catalysts for social and environmental change.

A Vision Rooted in Family and Passion

For Rachida Justo, the drive to champion social entrepreneurship and impact investing is deeply personal. Growing up in a family actively involved in social issues—her mother co-founded and/or managed three NGOs for gender equality and her father was a politician—Justo was imprinted with a strong sense of social responsibility. This background shaped her path, leading her to explore the intersection of business and social good.

Impact Bridge: Connecting Academia and Practice

The Impact Bridge-IE Chair, a collaborative initiative between IE University and Impact Bridge Asset Management, aims to bridge the gap between academic research and practical application. The Chair focuses on key areas such as the differential values of social entrepreneurs and impact funds, their role as agents of change, and the measurement of social and environmental impact.

Reflecting on the Chair's mission, Justo emphasizes the importance of connecting research with real-world applications. "We see ourselves literally as a bridge between academia and practice," she says. "Our goal is to bring together people from diverse sectors to address the complex challenges of our time."

Transforming Industries and Mindsets

One of the standout projects under the Chair's umbrella is the case study of Moda Re-, a social enterprise disrupting the fashion industry through a circular economy model. The Chair aims to understand and support the company’s efforts to disrupt the fast-fashion industry. This project not only highlights the potential of circular economy practices but also educates students and the broader community on sustainable fashion.

Another key focus for the Chair is developing frameworks to help impact investors support social enterprises more effectively. Traditional investment models often fail to account for social impact, leading to challenges in providing the right support. Justo elaborates, "We are creating actionable frameworks to help align financial objectives with social goals, ensuring that investments lead to meaningful change."

Measuring Success and Looking Ahead

Measuring the success of impact initiatives is a complex but essential task. For the Impact Bridge-IE Chair, success is seen in both tangible and intangible outcomes. The Chair has already made significant strides by bringing together diverse stakeholders from academia, finance, and the public sector. The high attendance and engagement at their events indicate a growing interest and recognition of their work.

Looking to the future, Justo envisions the Chair becoming a leading think tank and research center in the field of impact investing. "We are organizing a workshop in October that brings together impact investors and researchers to identify the research questions, the issues, and the doubts that keep them up at night and that could be answered through research. This will help us create research projects that are both relevant and actionable. "This collaborative approach aims to create a more robust and impactful ecosystem for social entrepreneurship and impact investing.

Advice for Aspiring Social Entrepreneurs and Investors

Rachida Justo offers invaluable guidance for those aiming to make a significant social or environmental impact. For individuals coming from the business world, she emphasizes the importance of learning from existing knowledge in the social sector. "Trying to learn from existing knowledge in the social space, including from social organizations that are not-for-profit, is fundamental," she advises.

Conversely, for those from the nonprofit or charitable sector, "the pitfall is turning your back on tested management and business practices that could help you further your impact and be more efficient," Justo notes.

Ultimately, Justo champions the bridging of these two sectors to create truly impactful organizations. "It's always about trying to bring people to that middle ground where we can learn from each other and not work in silos, like the social sector on one side and the business sector on the other, each with wrong assumptions about what works and what doesn't," she explains.

Justo also warns of the potential dangers if the finance world approaches impact investing incorrectly. "As much as the finance world can be a big catalyst for impact, it could also do a lot of harm if done wrongly, including, for example, diverting funds towards organizations that are not necessarily impactful but are better at communicating what they consider as impact without necessarily proving it," she cautions.

By fostering collaboration and mutual understanding between the social and business sectors, Justo believes we can create more effective and sustainable solutions to the world's most pressing challenges.

The Role of IE Foundation

IE Foundation plays a pivotal role in supporting the Impact Bridge-IE Chair. Rachida states that IE Foundation, “is very much aware of the benefits and the beauty of connecting practice with research.” The Foundation helps scholars translate their work into actionable insights for businesses and investors. This support is instrumental in advancing the Chair's mission and ensuring that the research conducted has a real-world impact.

In her closing remarks, Justo reflects on the importance of raising awareness about the Chair's initiatives within the IE community and beyond. She believes there are numerous untapped opportunities for collaboration, and by sharing their work, they can inspire more individuals and organizations to join their mission of driving social and environmental change. "This initiative of connecting our work with alumni and the broader community is crucial. There are so many untapped collaboration opportunities that we need to explore," Justo concludes.

Through the dedicated efforts of Rachida Justo and the Impact Bridge-IE Chair, supported by the IE Foundation, IE University is not only fostering academic excellence but also spearheading transformative change in society. By bridging the gap between research and practice, they are paving the way for a more sustainable and equitable future.