The investment industry needs a data-driven approach to impact measurement, that addresses the nearly $23 trillion of professionally managed assets in values-based investing, as individual and institutional investors seek to invest with both profit and purpose. We analyzed various methods of defining and measuring impact to see what is working and where there is opportunity for improving the state of the art, through conversations with over 20 industry experts. Our investigation revealed that the existing frameworks for impact assessment suffer greatly from the poor quality of the data that goes into them. The question of which framework to apply is frequently debated, yet the question of data quality is rarely discussed, and the field of impact investing suffers from a loss of credibility as a result.
Measurement frameworks and data vendors alike have been important to analyzing impact outcomes, making the case for greater disclosure and transparency. Yet, frameworks are ultimately only as strong as the data on which they rely. The influx of new methods to capture and analyze data holds the promise of revolutionizing the way investors are able to understand and manage impact.