​Even as impact investing has expanded from a niche strategy into a $500 billion global industry in recent years, it is still relatively young. The industry’s continued growth will rely in part on ensuring a consistent and effective method of impact measurement, especially as investors start demanding information about exactly how their dollars are moving the needle on the issues they target. 

But standardizing this piece of the impact investing process is far from simple. From the unique complexity of each initiative to the variety of players proposing solutions, industry alignment has been difficult to achieve—and the high stakes mean development cannot be rushed.

Data has become an integral component of investment decisions, and impact investing is no exception. It’s impossible to know whether an investment is effectively delivering impact without measuring and recording its progress.

This is why investors need reliable, standardized data.

Sophisticated investors use this information to make decisions about specific investments as well as to inform their overall strategy, with the goal of feeling confident that they’re realizing the greatest possible impact with their capital. From a bigger-picture perspective, impact measurement paired with thoughtful reporting builds industry knowledge of what works and what doesn’t. In turn, well-designed reporting illustrates the progress made toward tangible outcomes and helps raise the industry’s profile.

Despite the growing consensus around the need for uniform data, efforts to standardize remain fragmented.

With the Project Output - Impact Measurement Guidelines - our aim is to provide a concise and comprehensive guide for investors and mentors on the various alternatives and frameworks for measuring the impact of their investment and activities.

Sign up for our newsletter below to be the first to know when the guidelines will be published.
​

Author
Partners @i2 SustainIT

There are a wide range of measurement tools and approaches used within impact investment, and these are used by both investees and investors, as well as third party certifiers (e.g. for ecolabel certification). Research has found that investors tend to use a number of techniques that are suited to their specific needs.

Making real social progress means using the right data—and lots of it—to evaluate outcomes, but caveats and misunderstandings abound, even among professionals in the impact measurement arena. Many organizations simply don’t have a clear, evidence-based idea of how or why their programs work, and different organizations have different ideas of what impact measurement entails. Before making important decisions about allocating resources, organizations need to first identify their impact program, where they want it to be, and how to get it there.

To aid the process we would like to present some of the most recognized and widely used impact measurement frameworks. 

Global Impact Investing Network 

The Global Impact Investing Network (GIIN) is a not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. For more information, visit their website

GIIN introduces the concept of Impact Measurement and Management - includes identifying and considering the positive and negative effects one’s business actions have on people and the planet, and then figuring out ways to mitigate the negative and maximize the positive in alignment with one’s goals. Impact measurement & management is iterative by nature. 
To access practical how-to guidance to help advance your IMM practice, refer to IRIS+ guidance.

Impact Management Project 

The Impact Management Project (IMP) provides a forum for organisations to build consensus on how to measure, assess and report impacts on environmental and social issues. IMP convenes a Practitioner Community of over 2,000 organisations to debate and find consensus (norms) on impact management techniques. It also facilitates the IMP Structured Network – an unprecedented collaboration of organisations that, through their specific and complementary expertise, are coordinating efforts to provide complete standards for impact measurement, assessment, and reporting.
​
IMP defines impact as a change in an outcome caused by an organisation. An impact can be positive or negative, intended or unintended. To understand and measure any impact, the Project introduces the five dimensions of performance.
On the IMP page you can find them!  Visit their website

Study of Harvard Business School 

The aim of this study was to deepen the understanding of the specific practices and methodologies that established impact investors use to measure the social impact generated by their investments, and to analyse the conditions under which each measurement method is most relevant. The intended audience for this analysis are the impact investors themselves, as well as social sector organizations, traditional funders, and evaluators.

Impact investors employ a number of methods to pursue their objectives.  Recognizing that investors vary in their level of maturity and resources – and that their investees may also vary in level of impact measurement sophistication – is important. The Study proposes a framework that caters different integrated measurement models to each stage of investor and investee. Visit their website

Social Impact Investment Taskforce

The Group of Eight (G8) refers to the group of eight highly industrialized nations—France, Germany, Italy, the United Kingdom, Japan, the United States, Canada, and Russia—that hold an annual meeting to foster consensus on global issues like economic growth and crisis management, global security, energy, and terrorism. The Working Group Under the direction of the Social Impact Investment Taskforce, the Impact Measurement Working Group was established, consisting of 24 impact investing and measurement practitioners. 

The Working Group has identified four broad phases of impact measurement: Plan, Do, Assess and Review. Along with insight into the impact that an activity is generating, this process generates intelligence that can further enhance the measurement and investment processes. Visit their website

World Business Council for Sustainable Development / International Finance Cooperation

In 2006 WBCSD and IFC have joint forces to create a clear and practical measurement methodology that could be adapted to different business sectors, be used by operations anywhere in the world and be tracked over time. Unlike environmental impact assessments (EIAs) or environmental, social and health impact assessments (ESHIAs) that are normally carried out as part of due diligence to determine future potential impacts arising from a greenfield or brownfield business investment, they wanted to be able to measure actual impacts at any stage in the life cycle of an operation.

The resulting Measuring Impact Framework is designed to help companies understand their contribution to development and use this understanding to inform their operational and long-term investment decisions and have more informed conversations with stakeholders.
Visit their website

The Investment Integration Project 

TIIP’s mission is to help institutional investors understand the feedback loops between their investments and the planet’s overarching systems – be they environmental, societal or financial – that make profitable investment opportunities possible. TIIP also provides these investors with the tools to manage the impacts of their investment policies and practices on these systems. 

TIIP offers investors a framework for where to focus and how to build an effective approach. Going beyond traditional returns metrics, the framework analyses how to consider and target appropriate goals. The TIIP proposal focuses on “system-level” investments, or big-picture issues like the United Nations’ Sustainable Development Goals. Visit their website

Principles for Responsible Investment

The PRI is the world’s leading proponent of responsible investment. It works: to understand the investment implications of environmental, social and governance (ESG) factors; to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.

The PRI acts in the long-term interests: of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole. The PRI is truly independent. It encourages investors to use responsible investment to enhance returns and better manage risks, but does not operate for its own profit; it engages with global policymakers but is not associated with any government; it is supported by, but not part of, the United Nations.

Responsible investment is an investment strategy which integrates environmental, social, and governance (ESG) factors into investment analysis and decisions. It recognises that ESG factors can have an impact on the financial value of an investment and also that investments have an impact on the world around us. Visit their website

Author
Partners @i2 SustainIT 

On 19 October 2020 all partners in the Impact Incubator for Nurturing Sustainability - i2 SustainIT project gathered online for the 2nd project meeting which due to Covid-19 had to be organised virtually, hosted by the project partner from Bulgaria: CEED Bulgaria and supported by Knowledge, Innovation and Strategies Management Club (KISMC). The rest of the project partners: EPN Consulting, IDEC, Worldview Impact Foundation and Creative District participated virtually from UK, Greece and Belgium. The project has been co-funded by the Erasmus+ Programme of the European Union for its 2-years' implementation.

Each partner had the chance to talk about the impact investment and sustainability ecosystem in their country whereas many case studies encouraged interesting discussions comparing the ecosystems in a variety of European regions. Furthermore, the main topic discussed was related to the current situation in each country and the risk management and mitigation plan which is of paramount importance to have the flexibility of adapting quickly to any possible challenges arising due to the pandemic.

​The meeting was also focused on discussions about the project management activities led by EPN Consulting; dissemination strategy, financial and administration details. All partners agreed on next steps and the evaluation and quality assurance framework for the project. Another aspect touched during the meeting was about the 3rd meeting supposed to take place in Greece along with the 1st training under the project.

Moreover, CEED Bulgaria which is leading the 1st Intellectual Output of the project - Impact Measurement Guide (IMGuide), presented its structure, tools and each partner's role for supporting its development. Additionally, the project partners had a discussion on the output framework and suggestions for the content of the model and the main concepts, as well as previous and ongoing Erasmus+ projects related to the main topic of i2 SustainIT.

KISMC also opened the floor for discussion on the 2nd Intellectual Output - Design Thinking for Impact Incubation Toolkit (DTi2 Toolkit) and relevant updates to share with the partners. IDEC updated the consortium with progress on the 4th Intellectual Output - Digital Impact Incubator Platform (Di2 Platform).

During each meeting all partners aim to have a proactive catch up on the dissemination activities led by Creative District.

To learn more about the project, check our first blog article for the kick off of i2 SustainIT project: Impact Incubator for Nurturing Sustainability' Virtual Project Kick Off from London [i2 SustainIT].

​
Author
Partners @i2 SustainIT

Like all terminology, each of these words has its advantages and disadvantages. Creating a consensus around the meaning of a word means that we can speak a common language, facilitating the understanding of impact investing and attracting new participants or investors.

• Impact: impact refers to the social or environmental effects generated by an investment. Impact is defined by the context of the stakeholders, enterprises and populations they address.
• Impact investment: Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". Impact investments provide capital to address social and/or environmental issues.
• Social Investment: Usage of capital for generating financial returns, but with the primary purpose of generating social impact.
• Impact measurement: the process of quantitatively and qualitatively evaluating the impacts of an organization; the activities taken to evaluate and report on the financial and social change generated by an investment. 
• Impact measurement and management: includes identifying and considering the positive and negative effects one's business actions have on people and the planet, and then figuring out ways to mitigate the negative and maximize the positive in alignment with one's goals.
• Sustainable business: enterprise that has minimal negative impact or potentially a positive effect on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line.
• Societal impact: the effect on people and communities that happens as a result of an action or inaction, an activity, project, programme or policy.
• Sustainable Development Goals (SDG): a collection of 17 interlinked global goals designed to be a "blueprint to achieve a better and more sustainable future for all". The SDGs were set in 2015 by the United Nations General Assembly and are intended to be achieved by the year 2030.
• Environmental, Social, and Corporate Governance (ESG): refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies.
• Return on investment (RoI): is a ratio between net income and investment. A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments.
• Social Return on Investment (SROI): is a framework for measuring and accounting for this much broader concept of value; it seeks to reduce inequality and environmental degradation and improve wellbeing by incorporating social, environmental and economic costs and benefits. SROI is about value, rather than money.
• Social enterprises: companies that are both financially sustainable and concerned about creating a  social and/or environmental impact.
• Sustainable metrics: measures of sustainability, and attempt to quantify beyond the generic concept. Though there are disagreements among those from different disciplines, these disciplines and international organizations have each offered measures or indicators of how to measure the concept.
• Sustainable investing: Directs investment capital to companies that seek to combat climate change, environmental destruction, while promoting corporate responsibility.
• Socially Responsible Investment (SRI): An investment strategy that seeks to consider both financial returns and social good.​

Author
Partners @i2 SustainIT ​

The Impact Incubator for Nurturing Sustainability [i2 SustainIT] project inspires more connectivity in the social and environmental ecosystem through the United Nations Sustainable Development Goals. The project's duration is 2 years, to be completed in the end of September 2021 with an Impact Investment & Sustainability Conference. 

​Although the project has a set end date for its implementation under the Erasmus+ Programme of the European Union, we are firmly willing to continue contributing to this topic by using i2 SustainIT as an already established network and community to create social value and assist finding solutions to the world’s problem our society faces.

The i2 SustainIT is a continuation of another project, co-funded by the Erasmus+ programme. The project is BASET – Boost Aid for Social Entrepreneurship through Training with the overall objective to foster social entrepreneurship in Europe through elaborating, testing and providing a set of learning and training instruments to a large group of social entrepreneurship trainers/educators.

​The rationale behind continuing BASET is the realisation that such a project focused on social entrepreneurship aiming to provide a higher-scale of impact, will need a more sustainable approach and additional set of instruments to assist educators and investors; in the i2 SustainIT project – mentors and investors. i2 SustainIT focuses on the fact that all target groups need to better communicate with each other and express their needs accordingly, and also that impact investment and sustainability are under-explored topics with significant added value to tackling social and environmental challenges.

In the next section you can read more information about the project's objectives, methodology, results, impact and learn more about the partners involved in this exciting project which will contribute to the social entrepreneurship ecosystem in Europe and beyond.
​

The overall goal of the project is to maximise the understanding and transfer of knowledge on impact, impact investment and sustainability to tackle societal and environmental challenges.

Project objectives:

1. Create a set of innovative educational tools for mentors and investors to enhance theirs skills and know-how to better support social entrepreneurs in their impact journeys in the incubation phase;
2. Establish an immersive digital incubator platform, with an open access of the knowledge base of the developed tools for impact investors and mentors, while connecting them with the social entrepreneurs and their early stage projects.

​

Overall, the outcome of the project is a set of tools and resources embracing the impact investment and sustainability ecosystems supporting mentors by training them in the design thinking approach to integrate in their assistance and investors to responsibly invest in social entrepreneurs for maximising social impact.

Moreover, the project will provide the basis of mentors, investors and social entrepreneurs to have a virtual space – incubator, connecting all three groups and providing a platform for support as well as for investors to search for a pipeline of projects creating social impact.

The project will produce 4 outputs:

• O1 – Impact Measurement Guidelines (IMGuide);
• O2 – Design Thinking for Impact Incubation Toolkit (DTi2 Toolkit);
• O3 – Impact Investment & Sustainability Handbook (i2 Sustain Handbook);
• O4 – Digital Impact Incubator Platform (Di2 Platform).

​

he project consortium comprises of 6 partners from 4 countries:

• EPN Consulting - UK
  SME dedicated to Sustainable Transport, Smart Mobility in Smart Cities and European Projects.
• Worldview Impact Foundation - UK
  Non-profit international organisation with a mission to making an impact at the grassroots to create positive changes.
  
• Knowledge, Innovation and Strategies Management Club (KISMC) – Bulgaria
  NGO focusing on developing competences for adults in innovation management, creativity and entrepreneurship.
• CEED – Bulgaria
  Experienced business support organisation in the entrepreneurship development in Bulgaria.
• IDEC – Greece
  Consultancy with an accredited lifelong learning center in Greece and organizing in-service training courses for teachers and trainers, informal learning and vocational training.
• Creative District – Belgium
  ​Brussels-based organisation supporting initiatives in the creative and cultural industries for societal impact through providing innovation spaces for guidance and support to entrepreneurs.

​

Since the project is strongly focused on impact and sustainability, it provides direct positive impact in those dimensions through the primary target groups of mentors and investors nurturing the secondary target group - social entrepreneurs and increasing the investments in social impact, which in the long-term will tackle the challenges we face in the 3 dimensions.

Therefore, all the resources created during the project duration will eventually contribute to economic growth, reducing the negative impact on the environment and will foster the development of people, communities and cultures to achieve reasonable quality of life, healthcare and education across the globe. The digital platform that will be created will allow the development of such projects contributing not only to the life of the project after its end but will ensure durability of the project beyond by resolving important for the world issues.​