Can the Financial Markets Make the World a Better Place?

Erika Karp
Listen

Erika Karp calls it the myth that refuses to die.

Karp is the CEO and founder of Cornerstone Capital Group. The persistent myth she refers to is the idea that an investor can’t achieve competitive returns while simultaneously making a social impact. “That myth is not dead yet, but it should be,” she says.

With solid research and an earnest message filled with heart and passion, Karp is dispelling this false belief through her work with Cornerstone. The investment firm is rooted in the conviction that socially conscious investing is not only effective but also badly needed in the world today and can help make for a future that’s more sustainable and inclusive.

“I had a sense of urgency to move the capital markets in the direction of social impact,” says Karp, who founded Cornerstone in 2013.

In September, Babson’s Lewis Institute for Social Innovation awarded Karp the Centennial Social Innovator Award. “Social Innovator Awards recognize individuals who have set in motion transformative change,” said Cheryl Kiser, the institute’s executive director, as she presented the honor during the College’s Centennial Celebration. “They change mindsets, create new frameworks, and influence beliefs, all in service to creating a more just and sustainable world. Erika Karp has done just that.”

A Force for Good

With offices in New York City and Denver, Cornerstone considers environmental, social, and governance factors (known collectively by the shorthand ESG) when evaluating investments. It oversees $1.1 billion in assets from the families, foundations, and individuals who are clients. “We believe in a world where financial markets are a force for good,” reads its website.

That’s a bold message, and to sell it, Karp relies on two key tools. The first is her background. Karp is not a Wall Street outsider, say a philanthropist or political partisan, who is advocating for change. Prior to founding Cornerstone, she was the managing director and head of global sector research at UBS Investment Bank.

That sort of experience makes her not so easy to ignore. “There is a financial acumen that has to be brought, and you need to be compelling,” she says. “We have serious Wall Street credentials.”

Direct and Deeply Felt

The other tool she brings? Research that is not only comprehensive but also visceral. It connects with people. It’s not simply lines of data on a page.

Cornerstone uses a measurement resource it created, the Access Impact Framework, to show how well its clients’ portfolios align with the Sustainable Development Goals of the United Nations. Those 17 goals, which cover a range of issues from health to hunger to poverty, may seem hard to quantify at first from an investment standpoint.

“If you are looking at the U.N. goals and want to make them investable, you have to really have a framework that allows for that,” Karp says. “Our research offers that framework.”

Cornerstone’s framework uses an easy-to-understand heat map, with colors ranging from light to dark blue, to illustrate how well investments support those U.N. goals. “Her company purposely avoided using a numerical scale,” says Kiser, “because the heat map would reach people on a more direct, deeply felt, human level.”

Reaching investors on a human level is what Cornerstone aims to do. “If we can’t move people, we can’t move money,” Karp says.

A Growing Movement

For all of Cornerstone’s efforts, Karp knows that investing with social and sustainable considerations is far from universal. “The world is not there yet,” she says. “We have a lot of work to do.”

Still, the movement is growing, driven in part by the increasing alarm that climate change is causing. “We’re having this massive consciousness-raising moment in time,” Karp says. Eventually, she predicts that it won’t be seen as a unique or radical way to invest, that terms such “ESG investing” or “impact investing” won’t be used.

Instead, investing to make a social impact will be seen as the norm. “The jargon will probably go away over time,” she says. “We will be just talking about investing.”

Posted in Entrepreneurial Leadership, Insights

More from Entrepreneurial Leadership »

Latest Stories

Collage of four photos depicting Babson teams celebrating
Keeping Score: A Look at Babson Athletics’ Success by the Numbers From national and conference championships to academic achievements, Babson’s student-athletes continue to post impressive statistics. Here is a look at the numbers behind Babson Athletics’ successes.
By
Eric Beato
Editor / Writer
Eric Beato
Eric Beato is the Editor of Babson Thought & Action and Babson Magazine. A native of Chicago and a graduate of the University of Missouri School of Journalism, Eric has worked as an editor and writer at newspapers across the country, including the Chicago Sun-Times and Boston Herald. Eric joined Babson College in 2019 after working as the communications director for a private educational travel company and as the managing editor of six regional sports publications.
July 2, 2025

Posted in Community

A clear tip jar with cash sits on a counter
What Ending Taxes on Tips Could Mean for Workers and Tippers Babson thought leaders on tax policy explain how a federal proposal that includes eliminating taxes on tips might reshape the tipping economy.
By
Hillary Chabot
Writer
Hillary Chabot
Hillary Chabot is a writer for Babson Thought & Action and Babson Magazine. An award-winning journalist, she is known for her insightful reporting and dedication to detailed storytelling. With a career spanning over two decades, she has covered a wide range of topics, from presidential campaigns and government policy to neighborhood issues and investigative series. As a reporter for The Boston Herald, Hillary earned a reputation for tenacity and integrity. Her work at Babson College fuels her passions—to learn something new every day and conduct thoughtful, empathic interviews. She’s thrilled to be at Babson College, where students, faculty, staff members and classes provide compelling copy daily.
July 1, 2025

Posted in Insights

Members of the Babson community behind a Pride banner at the parade
Passion and Pride: How the Office of Belonging and Inclusion Supports the LGBTQ+ Community Babson’s participation in the Boston Pride Parade caps a busy and productive year of support for the LGBTQ+ community by the Office of Belonging and Inclusion, as it advances the College’s commitment to Inclusive Excellence.
By
Hillary Chabot
Writer
Hillary Chabot
Hillary Chabot is a writer for Babson Thought & Action and Babson Magazine. An award-winning journalist, she is known for her insightful reporting and dedication to detailed storytelling. With a career spanning over two decades, she has covered a wide range of topics, from presidential campaigns and government policy to neighborhood issues and investigative series. As a reporter for The Boston Herald, Hillary earned a reputation for tenacity and integrity. Her work at Babson College fuels her passions—to learn something new every day and conduct thoughtful, empathic interviews. She’s thrilled to be at Babson College, where students, faculty, staff members and classes provide compelling copy daily.
June 27, 2025

Posted in Community