By Triodos Investment Management
In the dynamic landscape of impact investing, small and mid-cap companies can be powerful engines of positive change. While large corporations often dominate both headlines and investment portfolios, investors seeking tangible impact alongside competitive returns should take a closer look at the opportunities presented by smaller listed firms.
Small and mid-cap companies – typically defined as businesses with a market capitalisation below USD 16 billion – offer several advantages compared to their larger counterparts. As Dimitri Willems, Portfolio Manager at Triodos Pioneer Impact Fund, puts it:
“Smaller companies are often very focused on the area they operate in. That’s something we really like.”
Unlike sprawling conglomerates, these companies frequently specialise in niche markets, enabling them to innovate and adapt quickly.
Focus and accessibility
Accessibility is another important advantage.
“Getting someone from Nvidia, Microsoft or Alphabet on the phone would probably be a challenge,” says Dimitri Willems.
“In smaller companies, access to the businesses – and to their CEOs and CFOs – is much greater than in large corporations.”
This closer contact allows investors to engage directly with management, build relationships and influence corporate strategy. For impact investors, that dialogue is essential.
Engagement and influence
Active ownership and engagement are central elements of impact investing. Direct access to management teams in smaller listed companies makes meaningful conversations possible.
“Normally, you’re sitting around the table with a CEO or CFO. That makes it easier to engage, influence and share ideas than with a large corporation,” says Willems.
And according to Alex Sokolowsky, Head of Investor Relations at Corbion, the relationship works both ways.
“The dialogue benefits both sides. We benefit from contact with investors who take a long-term perspective and are not chasing quarterly results like hedge funds often do,” he says.
Under-researched opportunities
Small and mid-cap companies often fly under the radar of mainstream analysts.
“There are not many external analysts following them,” Willems explains.
“Take Corbion, a Dutch food ingredients company with a market capitalisation of USD 1.5 billion. Around eight analysts follow the stock. By comparison, a company like BASF has 23 analysts covering it.”
This “under-researched” status creates opportunities for investors willing to do the homework themselves. They can identify undervalued businesses with strong impact potential before the broader market catches on.
Real-world impact
The intrinsic sustainability of many smaller companies makes them a natural fit for impact portfolios.
Alex Sokolowsky describes Corbion as “inherently ESG-friendly.”
The company’s products – ranging from lactic acid used in food preservation to algae-based omega-3 oils – are bio-based and designed to reduce environmental harm.
“Ninety-eight percent of our raw materials are bio-based,” says Sokolowsky.
This sustainability focus is not a marketing add-on, but a core part of the company’s business model.
Smaller companies can also change direction more quickly. Dimitri Willems compares them to “speed boats” rather than the “tankers” of large corporations, allowing them to respond faster to new challenges and opportunities.
Impact without sacrificing returns
A persistent myth is that impact investing requires investors to accept lower returns. Corbion’s experience points in another direction.
“Strong impact does not have to come at the expense of solid returns,” says Dimitri Willems.
Corbion’s 2025 financial results support that argument.
“We increased our EBITDA by around 26 percent in 2025 and delivered free cash flow of around USD 91 million,” says Alex Sokolowsky.
“As a result of the strong performance, we also announced a special dividend.”
The case illustrates how a strong sustainability profile can go hand in hand with solid financial performance.
Diversity, challenges and opportunities
The universe of impact investments among smaller companies is broader than many assume.
“Many people think impact investing is only about renewable energy like wind and solar. But the field is much more diverse,” says Dimitri Willems.
“You can also create impact by investing in areas such as telecommunications or fitness companies.”
At the same time, smaller businesses face challenges including lower visibility and fewer resources dedicated to compliance and reporting. But investors also see opportunities in this.
“There’s less information available, so we have to do more groundwork ourselves,” Willems says.
With dedicated sustainability analysis, impact investors can help strengthen companies’ sustainability efforts while identifying overlooked opportunities.
The power of investing early
History shows that many of today’s largest corporations once started out small.
“NVIDIA also began as a smaller company,” says Dimitri Willems.
“If you make sure that small and mid-cap companies move in the right ESG direction early on, their future impact can become enormous.”
Investing in small and mid-cap companies is therefore not only about financial opportunity. It is also about helping shape the future of business and society.
According to Dimitri Willems, the combination of focus, flexibility and close dialogue with investors makes smaller companies particularly well positioned to deliver meaningful positive impact.
