There are multiple ways to measure impact. This is very much like measuring impact of your corporate social responsibility spend.
One of the best ways to initiate the measuring exercise is to start with the “Sustainable Development Goals”. SDG’s aim at over all development and well being of citizens across the world.
For instance in front of goal one; Mention number of Jobs created at the bottom of the pyramid.
For investor; Simply list down the SDG’s and write the impact / change your investee company / project has created in front of each SDG. This way you will understand which goals you are able to support and how much.
For Funds; Measuring impact viz a viz SDG’s is simple and helps influence investors. Investors have a preferred goal in mind and this method helps them invest in the fund aiming the specific SDG.
SDG’s
http://www.un.org
The other ways to measure impact;
- Expected returns method; financial and non financial. Non financial return has to be in terms of climate benefits, carbon, jobs created etc.
- Theory of Change Model
- This model helps you understand the path to intended impact as a part of due diligence
- Mission alignment model
- This model helps you understand if the investors mission is similar to yours. Also helps monitor impact investee against funds mission.