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New Norms in Impact Measurements
Hetal Sheth 1/1/20 1:54 PM 7 min read

New Norms in Impact Measurement & Management

Impact Measurement & Management in 2021

We are witnessing one of the most important trends in our lifetime called the impact revolution. While this revolution may not be as big as a tech revolution, it has the potential to create a profound change.  This revolution focuses on community and different impact ecosystem players. In 2019, major impact conferences such as GIIN Investors Conference in Amsterdam, SOCAP in San Francisco,  GSG in Argentina, and Social Value International in Taiwan declared that impact investing and impact measurement and management are two sides of the coin. The success of impact investment depends on impact investors taking impact evidence seriously. How should asset owners, asset managers, and assets prepare for 2020? We will give you in-depth insight so that you can align your impact strategy.

We consistently heard two calls of action:

  1. All of us in the impact investment space must move the needle towards a shift in how capital allocates and how businesses align with investment impact.
  2. In 2020, asset managers should improve consistency in impact evidence among different investments.

In 2019 global conversation solidified the following points, 

Have resources to support and implement impact measurement and management

Listen to in-depth summary and step by step journey to IRIS+, Impact Management Project, and SDG Impact certification below ( Listen Time: 60 Min )

Impact accounting starts with an Impact management strategy.

Capture fund's motivation(s) for engaging with the SDGs, determine its SDG impact intentions, and develop its theory of change. Start the process with impact statement or impact goals creation, which can help document precise SDG impact intentions and the Fund's impact goals. Also, document the organization's impact measurement and management practices, standard business practices, governance, and controls.

The following short video is a brief primer to defining strategic intent and goal setting.

Read More: How to Maximize Impact Management and Measurement?


UNDP SDG Impact practice standards 

There is a common fallacy that an organization can take current programs and align with the best possible SDG Goal, SDG Target, and SDG Indicator. This approach has a risk of SDG washing. The real goal for aligning with SDG is to ensure that investors prioritize based on the country mapping. Based on key priorities, the investor may choose theirs on impact thesis. 

For example, let’s issues in Jordan or Mexico. Both countries have seen a significant influx of refugees. If we look at the ground level, different organizations typically play different roles concerning SDG alignment. To manage refugees, the role of the social enterprise in Jordan would be different from international development agencies or NGOs. While NGOs may be suitable for hunger as short-term relief, a social business may focus on job creation, economic development, health, and gender inequality.

If you are an impact investor and unsure how to align with SDG, we highly recommend that you contact your nearest GSG NAB - National Advisory Board for further advice.

According to SDG Impact, "The UNDP Practice Standards are part of the SDG Impact initiative and the Impact Management Project. These practice standards provide practical guideposts that make it easier for the private sector to operationalize the SDGs and shorten the runway from an interest in adopting good impact practiceTo recognize and encourage good practice, the UNDP Standards include a tiered certification framework to acknowledge and differentiate good practice in the market, with an SDG Impact Seal that would be awarded based on compliance with certification criteria."  

Recommended reading:

SDG Standards

4 Reasons Your Social Enterprise Needs Social Impact Consulting

GSG signs landmark agreement with UNDP
The unifying power of the SDGs

Prepare for SDG Impact certification 

SDG Impact practice standards for private equity are largely divided into three sections

  1. Standards for strategic intent and goal setting: This is the first step in the impact management process. Impact strategy step provides actionable guidance on developing and documenting impact strategy. This step helps an organization make operational design, decision-making strategy, and manage risk by translating the dynamic relationship between why what, and how.
  2. Standards for impact measurement and management: This section provides actionable guidance on what proper impact measurement and management practices look like throughout the investment life cycle. There are eight elements of a good IMM practice, as explained below.
  3. Standards for transparency and accountability: This section provides benchmarking in communication with external stakeholders to ensure transparency. Assurance with independent certification will be encouraged.

We will take a deep dive into 8 points of impact measurement and management section and how closely it aligns to Impact Measurement and Management with Impact Cloud®, along with training videos.

Read More: New Norms in Impact Management and Measurement


Include stakeholder perspective

Stakeholder’s voice has been an important part of all the global conversations. Social Value International has that as their first principle; Impact Management Project highlights that as WHO and HOW MUCH, and SDG Impact has that as their impact strategies. You can use a quantitative and an artificial-intelligence-based approach to integrating stakeholder perspectives throughout the investment lifecycle. Watch this video to see how you can manage stakeholder's voices in a program on Impact Cloud®. 

Read More: 8 Important Phases of Impact Data Management


Align with Impact Management Project 

Impact Management Project sometimes referred to as IMP,  is a framework for building global consensus on measuring, managing, and reporting impact. Since 2016, the IMP has brought together a practitioner community of over 2,000 organizations to establish norms and share best practices. The IMP also facilitates the IMP structured network, an unprecedented collaboration of standard-setting organizations coordinating efforts to provide complete guidelines for impact measurement and management.

Many leading standards like IRIS, GRI, and SASB are starting to integrate Impact Management Project to use standards consistent with the Impact Management Project based on five dimensions of impact. What, Who, How Much, Contribution, and Risk. You can align your impact strategy to IMP dimensions or Theory of change in Impact Cloud. IRIS+ is another great starting point as it provides robust guidelines in selecting metrics. As you start building impact strategy as a fund manager or an investee, having more than 4000 standards metrics built-in the platform such as Impact Cloud® simplifies the process. Many of them are aligned with different areas of impact, theory of change steps, SDG Goals/Targets, Impact Management Project dimensions. 

Listen to in-depth summary and step by step journey to Stakeholder Voice, Impact Management Project, and SDG Impact certification below ( Listen Time: 19 Min )

Start with IRIS+ 

In May 2019, GIIN released much awaited IRIS+ profile aligned with SDG Goals and Impact Themes. Wherever appropriate and feasible, the Fund is encouraged to select standardized metrics and include outcome measures or at least well-evidenced proxies aligned with the SDGs and associated targets and shared in context aligned to five dimensions of impact IMP. IRIS+ is a foundational core metric for various impact themes or SDG Goals.

WE SAW A CLEAR CALL FOR ACTION during GIIN Investors’ conference and SOCAP to start aligning toward IRIS+ profiles. While the IRIS+ profile is a good start for the area where there is an alignment, many impact themes may often not align with the Fund. In that situation, we highly recommend that you still use the IRIS+ profile as a reference guideline and create your profile. Impact Cloud helps you build impact strategy through the drag and drop-based impact strategy approach.

Read More: Putting the “S” in ESG Social

Resources to support

Impact Measurement and Management

While many impact investors are new to the field, there is a major shocking reality. A lack of impact evidence often will end up with legal risk, financial risk, reputation risk, or worst community risk. While there is a clear understanding of international development to allocate at least 5% of funding towards monitoring and evaluation, there is a strong call for action by leading practitioners to allocate 5 to 10 percent towards impact measurement and management.

Standards now give a complete guideline with practical thresholds for impact management, operationalize and implement industry frameworks and principles and inform and drive impact and financial performance.

Leading asset owners, asset managers, and assets have built a robust impact management strategy on SoPact’s Impact Cloud®. Now you can also start your impact journey with the most comprehensive and easy-to-use impact measurement and management process within a short time. Asset managers can now prepare for SDG certification through a comprehensive, flexible, and easy-to-use solution that aligns with your impact goals. With Impact Cloud®, you can save significant time and streamline the entire process from asset manager to asset level.

Learn More: Impact Measurement and Management


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Hetal Sheth

The founder of Ektta, and co-founder of SoPact, Hetal holds a deep passion for establishing enduring impact management practices in the social sector to have built-in learning and accountability.