Author: IE Univerisity
Over the past decade, impact investing has moved from the margins of finance into a rapidly growing global investment movement. Institutional investors, foundations, and asset managers increasingly seek not only financial returns, but also generate measurable social and environmental outcomes (Hockerts et al., 2022; GIIN, 2024; OECD, 2024). The focus on measurability is one of the key features of impact investing and a key point of distinction from broader forms of sustainable finance (Hockerts et al., 2022; GIIN, 2019; Höchstädter & Scheck, 2014).
Yet the more central measurement becomes, the more visible its limitations appear (Schlütter et al., 2023). Impact itself is complex, multidimensional, and often difficult to capture in a consistent way. Meaningful assessment requires attention to issues such as intentionality, additionality, contribution, materiality, measurability, and attribution (Hockerts et al., 2022). The challenge, then, goes beyond mere data collection and involves translating real social and environmental change into indicators that are robust enough to inform decisions.
To address this challenge, the field has produced a growing range of frameworks and tools. IRIS+, the Impact Management Project, and various sustainability reporting standards all aim to bring structure to impact assessment. But the proliferation of frameworks has not solved the underlying problem. The ecosystem remains highly fragmented. and is still described as “metrics-rich” but “data-poor,”: there is no shortage of indicators, yet their uptake and consistent use remain limited (Watts & Scales, 2020; Roor & Maas, 2024). For investors, this fragmentation creates a practical problem: : lack of comparability (Berg et al., 2022). When different methodologies rely on different definitions, indicators, baselines or data sources, assessments become difficult to compare across organizations, portfolios, or funds (OECD, 2024). Research on sustainability ratings shows that the same company can receive very different scores depending on the provider, and that much of this divergence stems from how underlying indicators are measured rather than how they are aggregated (Berg et al., 2022). The challenge, therefore, is not only about choosing better metrics. It is also about improving how the underlying data are generated, structured, and validated (Roor & Maas, 2024).
From Fragmented Metrics to Impact Data Infrastructure
This is where the debate needs to evolve. Improving impact measurement requires both methodological refinement and stronger infrastructure. capable of organizing and integrating impact data systematically (Berg et al., 2022; Casasnovas et al., 2025; OECD, 2024).
In financial markets, data infrastructure enables investors to compare companies, benchmark them and assess risks. In impact investing, by contrast, data are often dispersed across multiple sources, collected using heterogeneous methodologies, and difficult to integrate into investment analysis. Because measurement systems also shape how markets define value and assess performance, stronger impact data infrastructures could support benchmarking, improve comparability, and make impact information more useful for capital allocation.
In this context, initiatives such as ADALTIM are especially relevant. They point toward a model in which impact data, methodologies, and rating systems are brought together within a common infrastructure, making impact information more useful for capital allocation.
The next step is to refine existing metrics while building the infrastructure that allows impact to be assessed consistently and used credibly in decision-making. (Berg et al., 2022). With stronger foundations for data collection, validation, and integration, impact markets will be better equipped to direct capital toward activities that generate meaningful social and environmental outcomes.
References
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Casasnovas, G., Hehenberger, L., & Papageorgiou, A. (2025). Inscribing impact: Measurement practices in the making of moral markets. Journal of Management Studies. https://doi.org/10.1111/joms.13184
Global Impact Investing Network (GIIN). (2019). Core characteristics of impact investing. https://thegiin.org
Global Impact Investing Network (GIIN). (2024). Annual impact investor survey. https://thegiin.org
Hockerts, K., Hehenberger, L., Schaltegger, S., & Farber, V. (2022). Defining and conceptualizing impact investing: Attractive nuisance or catalyst? Journal of Business Ethics, 179, 937–950. https://doi.org/10.1007/s10551-022-05157-3
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OECD. (2024). Managing and measuring the impact of sustainable investments. https://www.oecd.org/en/publications/managing-and-measuring-the-impact-of-sustainable-investments_2ff2b2f4-en.html
Roor, A., & Maas, K. (2024). Do impact investors live up to their promise? A systematic literature review on (im) proving investments’ impacts. Business Strategy and the Environment, 33(4), 3707-3732.
Schlütter, J., et al. (2023). Impact measurement practices in impact investing. Journal of Business Ethics.
Watts, N., & Scales, I. R. (2020). Social impact investing, agriculture, and the financialisation of development: Insights from sub-Saharan Africa. World Development, 130, 104918. https://doi.org/10.1016/j.worlddev.2020.104918