Impact Returns​

It is acknowledged that for an investment to be counted as an ‘impact investment,’ it is the inherent impact the investment can achieve that must be considered. Measuring impact can be subjective as an enterprise can create impact in several ways.

Impact: Outputs Vs Outcomes

The theoretical framework that underlies the assessment of enterprise impact makes an essential distinction between outputs and outcomes.

An output is a product or service produced by an enterprise; The (ultimate) outcome is the effect of the output in improving people’s lives.

1. To what extent will the intended output (whether a product or operational benefit) occur?

2. To what extent will the output contribute to the intended outcome?

With this in mind, the following impact measurement framework can be applied:

The number of individuals experiencing an outcome

Quantitative evidence of the improvement or positive effect made

The $ value of this effect

Risk adjustment made based on the uncertainty of the impact.

UN Sustainable Development Goals (SDG)

To create consistency and measure output and outcome, many impact investments are adopting the UN Sustainable Development Goals (SGD) framework to measure and report against.

The Sustainable Development Goals or Global Goals are a collection of 17 interlinked global goals designed to be a “shared blueprint for peace and prosperity for people and the planet, now and into the future”. The SDGs were set up in 2015 by the United Nations General Assembly and are intended to be achieved by 2030.

The United Nations (UN) 2030 Agenda provided the framework of Sustainable Development Goals and measurable targets. Each goal is interlinked with other SDG goals to “develop mutually reinforcing policies so that policies work together to achieve national goals and objectives while avoiding or minimising negative impacts in other policy areas.” In other words, from a systems design and thinking perspective it’s the recognition that working towards any SDG may create implications and impact on other SDGs.

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