Among the most significant confusions in investing is this: when you buy a stock for $10, you give up $10 now in exchange for some variable return in the future. Importantly, the seller gets back $10 and gives up the same variable return in the future. Both parties are happy with this trade (due to different preferences or beliefs about the world).
This symmetry applies to the social impact too. The buyer gets a stock producing social impact. The seller gives up a stock producing social impact. It is unclear whether this transaction has affected the total social impact in the world at all. My understanding is that the section A Rational Take on Investing does not take this into account.
The above paragraph is the typical second-order reasoning in this space, and is a more explicit version of a point kbog made.
First-order: I claim credit for whatever good/bad things I’m associated with, thus impact investing counts for a lot.
Second-order: taking counterfactuals into account, impact investing appears to have approximately zero impact.
The interesting stuff: controlling or launching important startups, and shareholder activism in general, seems like it might do something, and can sometimes be targeted at the most promising cause areas. Plant-based meat alternative companies are the companies that I’m aware of that seem likely to be worth EA investors’ attention for this reason. Maybe holding tobacco company shares in order to be able to more easily lobby them might be attractive for EAs focused on global health. Note that these activist approaches are entirely distinct from what most of the impact investing industry is doing.
There might be a further consideration, people might not start or fund impactful startups if there wasn’t a good chance of getting investment. The initial investors (if not impact oriented), might still be counting on impact oriented people to buy the investment. So while each individual impact investor is not doing much in isolation, collectively they are creating a market for things that might not get funded otherwise. How you account for that I’m not sure.