Project funded by

European Investment Bank Institute|

Project partner

The Young Foundation|  


Our project draws on elements of theory, policy and practice, integrating both qualitative and quantitative approaches, and capturing the dynamic changing nature of social challenges and procedural responses. More specifically, the study: 

  • Examines existing theories of good practice in metrics, refining them as appropriate;
  • Reviews how institutions (both government and non-government) have acted to shape the development of non-financial metrics, and considers their plans for future developments; 
  • Determines how wider social and environmental metrics have been used in practice by impact investors, and assess lessons for improvements in utilisation. 

The project incorporates a range of techniques – an in-depth literature review of metrics theory and practice, interviews, a major survey on metrics practice among impact investors, quantitative analysis of selected investment projects, expert seminars and policy analysis.

Specific elements of the research will include:

A- Understanding and examining how wider objectives are incorporated into decision-making and monitoring

The way that social and environmental objectives are integrated into decision-making and evaluation is a crucial issue. In developing our conceptual framework, our preliminary assessment is that findings from business literature provide useful insights. 

These suggest a distinction between (a) the overarching purpose, as expressed through corporate mission and values; and (b) the process of determining them, which involves a complex (formal and non-formal) interplay between the competitor/political/social environment, the ‘operating system’ (or bureaucracy), and leadership. 

This part of the investigation endeavors to answer, for example, the following questions: 

  • What are the stated ways in which these objectives are formally sewn into the decision-making processes of projects? How do non-formal objectives enter the process? 
  • What is the process for squaring differing objectives (in particular, different elements of the ‘triple bottom line’), and differing timescales?

B- European Survey of Social and Impact Investors: 

We will carry out a comprehensive survey of social investors. It will seek to find out how they formulate social objectives, integrate these objectives with financial considerations, and assess and manage the investment impact.  Questions will cover a variety of topics connected to the issues raised above, including:

  • What (social) objectives are currently taken into account in decision-making processes?
  • What weighting is applied to these objectives? 
  • Are these weights subject to change, and if so, under what types of circumstance?
  • How is risk connected with social objectives taken into account?
  • How are social objectives assessed in practice when making investment decisions? 
  • How are social objectives reviewed when examining progress on performance after investments have been made?

C- Case study analysis

In addition to the survey, the applied part of the research focuses on the in-depth examination of case studies, which investigate within a range of areas and sectors how social impact has been incorporated and measured in impact investment schemes at the pre-appraisal, appraisal, and monitoring stages.

The research team will identify a mix of projects at different stages of the development process. This mix will provide examples of best practice or exemplify the lessons learned in terms of taking into account and measuring social issues.

The scope of case studies centred on impact investing can be very broad. We propose empirical case studies that focus on the following:

  • Activities that provide products or services to individuals in low-income communities and populations;
  • Geographic focus on neighbourhoods and communities in urban areas 

Low income communities and ‘weak market’ city neighbourhoods are often the places where positive social impacts are most needed. A considerable number of middle- and lower-income cities exhibit above-average rates of violence and insecurity, inequality and poverty, and the problems are increasing.  Yet at the same time there is evidence that operating in low-income markets force companies to innovate in order to create low-cost products, new business models and efficient supply chains (United Nations Global Compact Team and Rockefeller Foundation, 2012). 

The combined examination of the case studies and the survey will be instrumental to:

  • Identify systematic differences in the relative importance of different types of non-financial objectives for urban projects and match these against available metrics, to determine how effectively value is being captured;
  • Outline differences in achievement in non-financial objectives, to assess the extent to which measures of risk for non-financial objectives are effective at spelling out the magnitude of potential pluses and minuses to social benefits.