Too Much of A Good Thing? Drawbacks of Stressing Measurement of Impact Investing

Abstract

The current emphasis on impact measurement raises several challenges, including ethical ones. Rather than taking for granted that more and better measurements are crucial to the development of impact investing, the authors of this article question what drives this measurement mania and expose some related pitfalls. We also develop some practical and original ways to help the impact investing movement avoid some measurement-related traps, such as making numbers less salient and combining them with more qualitative elements, reducing the likelihood of metric overload, inviting investors to adopt the perspective of a beneficiary, or introducing random procedures (sortition) to give a voice to neglected stakeholders.