Step 5

How do I measure the intended impact?

Once a suitable impact investing product has been selected, it is important for investors to figure out whether they are able to assess and report upon the impact achieved. This requires a thorough and rigorous methodology, which validates the investment approach and offers transparency and accountability to stakeholders across the board.

Measuring the impact is key to demonstrate the positive change that has been achieved. Currently, there are a number of different approaches and methodologies used in order to understand how impact is generated and whether impact objectives are achieved. The impact investing industry is heading towards more standardisation with the goal of having one reference point against which the impact management systems of funds and institutions can be assessed. These activities are spearheaded by the IFC-led Operating Principles for Impact Management (the Principles). The Principles draw on best practices from a range of impact asset managers, asset owners, asset allocators, and development finance institutions. They are designed to be fit for purpose for a range of institutions and funds and can be adopted at different levels. Three key pillars lie at the core of these Principles:

Investment intent

The social and/or environmental goal(s)/outcome(s) of the investment are in line with a long term impact strategy, including the avoidance of unintended negative consequences.


The difference an investment makes to the investee/​end beneficiary: This contribution can be financial and/​or non-financial, for example through technical assistance or active engagement with the investee.


The measurement system in place links intent and contribution and enables the investor to assess the impact both ex ante as well as ex post-investment. Key impact indicators will vary depending on asset class, impact theme, investment product, and data availability.


In order to measure the impact, investors need to thoroughly understand and assess their investment intent, the appropriate impact KPIs, who the beneficiaries of their investment are, what their contribution will be, and what kind of unintended negative side-effects their investment might have.

Finally, investors can map their intended or achieved impact against the UN SDGs and/​or the SFDR to visualise with which of the SDGs/​SFDR articles their impact theme can be associated.

The Principles and other industry alignment initiatives, such as IMP, GRI, SASB, IFC Performance Standards, IRIS, and HIPSO, to name a few, guide investors to find answers to the questions outlined above and thereby help to build comprehensive frameworks to manage and measure impact across asset classes and impact themes.

The other steps


Which impact do I want to achieve?


What liquidity and risk profile am I looking for?


What is my geographical focus?


What is the adequate impact investing vehicle?


How do I measure the intended impact?


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