A record high stock market, low unemployment, strong economic growth and renewed hope of tax reform-sounds like a recipe for business success. So why are so many institutional investors pessimistic about the future? Turns out institutional investors-pension funds, mutual funds, money managers, insurance companies, investment banks, hedge funds-share the same concerns as many Americans: an increasingly toxic, dysfunctional and hyper-partisan Washington.

The Edelman Trust Barometer Special Report: Institutional Investors found that investors are concerned that a more politically charged environment is creating new challenges for companies and threatening confidence.

When asked to look back on the economic and political environment over the last 12 months, 54 percent of investors said they were negative or neutral about the current investing climate. When asked to look 12 months ahead, these same investors were even more pessimistic, with nearly three-fourths (72 percent) describing themselves as having a negative or neutral outlook on the future.

Dig deeper into the data and you learn the clear cause of institutional investors' concerns.

A whopping 79 percent of investors believe that a country's political climate impacts the companies in which their firms invest. That is not a statistic that bodes well for companies in America, where fury fuels the political climate.

In America, Republicans and Democrats are more divided along ideological lines now than at any point in the last two decades, according to the Pew Research Center. From the campaign trail to Capitol Hill, everywhere you look today you see conflict and a lack of common ground. This deep-rooted partisanship has polarized America, paralyzed Washington and is having a negative impact on investment in U.S. businesses.

The Edelman survey found institutional investors' apprehension is compounded by low trust in regulators, government and media-institutions that traditionally played important watchdog roles. Only 28 percent of investors trust these institutions, with the percent of investors who view rating agency representatives, government officials and business/financial journalists as credible sources of information about a company at only 28 percent, 19 percent and 17 percent, respectively. 

All in all, it's a picture of investors discouraged about the present, worried about the future and doubtful that America's leaders can lead us in the right direction.

In recent years, there has been growing concern that partisan politics is impacting America's economic progress. According to the Harvard Business School's State of U.S. Competitiveness, "dysfunction in America's political system is now the single most important challenge to U.S. economic progress." This viewpoint is understandable when America's political leaders aren't seeking pragmatic solutions or reaching compromises on important issues that could spark economic growth, such as tax reform, investing in infrastructure, or expanding the immigration system for much needed highly-skilled foreign workers.

There are countless contributors to today's political dysfunction: money, media, super-PACS, extreme candidates, gerrymandering-the list goes on and on.  In the end, there is no one-shot solution to end the political polarization.

So what can one do? Well, there is a lot that American voters can do to reform government. But that is a topic for a separate blog. For institutional investors specifically, they can look to use the power of capital to push progress.

Impact investing, for example, supports industries and funds with the intention to generate social impact alongside a financial return. It is not a partisan process. Regardless of party affiliation, impact investors work to bring market-based solutions to societal challenges. It's pushing progress while still pursuing profits.

Over the past decade, the impact investing space has become much more attractive to asset managers and embraced by clients, as a growing body of evidence shows that consideration of social challenges by asset managers can enhance returns. There is now approximately $114 billion worth of impact investing assets under management, according to the Global Impact Investing Network (GIIN).

Today, nearly every major investment bank and asset manager offers mission-related investment services, including BlackRock, Goldman Sachs and private equity giant TPG. One only needs to look at the White House to see further evidence of the growing impact of impact investing. Dina Powell, who led Goldman Sachs's impact investing group, is one of President Trump's most trusted advisors. While partisan gridlock will not end any time soon in Washington, companies can still work to inject confidence in America's future and the possibility of progress. It's not only needed, it's expected by investors.

According to the Edelman Trust Barometer, 76 percent of investors believe that companies have an urgent obligation to take a public stand on one or more social issues to ensure the global business environment remains healthy and robust. Among the issues most frequently selected by investors were education reform/training, environmental issues, and free trade. As Richard Edelman said, "This new research shows that investors and the public alike are looking to business to fill the void left by the implosion of trust in government by taking a stand on the issues of our day."

Sean Neary is an EVP, Financial Communications & Capital Markets, Washington, D.C.