Do impact investors live up to their promise? A systematic literature review on (im)proving investments' impacts

Impact investing holds the promise to make the world a better place. However, when investors measure their impact only to prove it—without improving—it cannot be expected they will live up to this promise. This systematic literature reviews a sample of 141 academic articles on impact measurement of investments. The results show that measuring impact to prove and to improve is a distinct practice. Measuring to prove impact mainly relates to show accountability to stakeholders and relates to legitimacy, stakeholder and agency theory. Measuring to improve relates to investors understanding impact, acting on envisioned impact in decision-making, and relates to decision-making, performance measurement and organisational theory. Investors can improve impacts by integrating impact information throughout an integrated investment process. Although several authors mention improving impact, they provide limited guidance on this. Future research is needed on operationalising impact throughout the investment process, as a practice to improve investments' impact.