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The purpose of this paper is to examine the institutionalization of screening and metrics in conventional finance and reflect upon the implications for Islamic finance.

The study involves the analysis of archival data, interviews and fieldwork with current impact investors in North America and the European Union to trace the historical development of impact investing screening and metrics.

First, the paper explores how conventional investors have applied positive and negative screens in the creation of their values/mission-based investment strategies. This is followed by a historical analysis of the development and implementation of impact metrics and regulatory frameworks that influenced the growth of conventional impact investing. The possible benefits of learning from these experiences for the Islamic finance industry are then considered. The paper concludes with an analysis of the potential value of mission/values-based investing for the economic development of the Middle East and North Africa region.

Though not a comprehensive study of institutionalization, this study supports recent calls for more intentional use of capital for blended returns within Islamic markets. To support these initiatives, it provides scholars and practitioners with multiple recommended points of entry into this growing market.

There has been scant organizational research examining the development of best practices within the impact investment community and how these might be applied to other contexts such as Islamic finance.