In recent years, the idea of impact investing—the act of investing with the intention of generating positive social and environmental impact, alongside a financial return—has gained ground in India. According to the recent IIC-Asha Impact report, the Indian impact investing industry has reached more than 490 million people with a cumulative equity investment of USD 11 billion spread across 600 impact enterprises, over the last ten years.

Impact measurement and management (IMM) is a critical component of impact investing. As a concept, impact measurement is not new and has been prevalent in international development for decades, through the monitoring and evaluation component of social or environmental projects. However, the integration of IMM into an impact investor’s decision of whether to invest or not, is a fairly new construct.

Simply put, IMM is defined as the process of measuring, assessing, and improving the impact of an investor’s portfolio on people and the planet. It enables investors to assess the nature and extent of the investee’s impact at each stage of the investment life cycle, and then apply the learnings to define and refine their investment strategy.

Given this, the Impact Investors Council (IIC) collaborated with KPMG to publish a report which captures the current state of IMM practices among impact investors in India. This was done by surveying 26 leading impact investors active in India, through a series of virtual interviews conducted between May and August 2020.

The report examines their IMM practices at two levels—the macro and the micro—and develops an IMM framework to identify impact across five stages of the investment life cycle. This framework can also serve as a reference for new investors looking to integrate IMM into their investment process.

Read the full article about impact investing by Ramraj Pai, Shriya Nene, Swasti Saraogi at India Development Review.