Choosing the best fit

Asset managers’ impact measurement practices should be tailored to the resources they have at their disposal.

- Sawa Nakagawa

All investments have an impact – either positive or negative. A positive impact can be generated deliberately or unintentionally. Selecting the right metrics is an important tenet of the impact measurement and management process. But simply measuring impact does not necessarily lead to creating impact.

Rather than focusing on what we want to measure, we need to shift our discussion to the purpose of implementing our impact investing strategy, and what changes we want to create and how. The newly published Impact Investing Handbook: An Implementation Guide for Practitioners by the Rockefeller Philanthropy Advisors, talks about the importance of articulating ‘why’ investors pursue impact investment. The ‘why’ – which is often said to be underappreciated – “establishes the values, goals, and parameters”. It leads to a “more thoughtful and consistent strategy.”