Towards harmonised management and measurement of impact

This paper analyses how development finance institutions (DFIs) manage and measure the impacts of their investments. Using the logic of an earlier scoping exercise, we examine how DFIs operationalise the different impact management and measurement (IMM) tools and initiatives emerging from harmonisation efforts within the industry, or roll out their own proprietary frameworks. This mapping enables us to draw broad conclusions for other investors operating in a development context. Namely, it is possible to both harmonise broad sets of agreed values (principles) and standardise metrics and indicators. At the same time, the paper shows that it is not useful to converge towards a “single, limiting” measurement framework. Ultimately, the different contexts and geographies DFIs operate in, as well as their different stakeholders and shareholders, demand flexibility. Nevertheless, convergence around underpinning standards of practice is essential to producing transparent, consistent and comparable data on impact. Such data on impact, outlining what works in different geographies and contexts, is critical in strengthening the efficient deployment of funds. In this sense, we want to avoid both impact washing and a “race to the bottom”, in favour of an aspirational drive towards better impact management and measurement.