Impact investing has grown significantly over the past decade, driven by a shared ambition: generating positive social and environmental outcomes alongside financial returns. As the market matures, expectations around impact measurement have also increased. Investors, beneficiaries and regulators alike are asking a simple question:
What impact is actually being created?
Yet answering this question is far from straightforward.
While environmental impacts, such as greenhouse gas emissions, increasingly benefit from standardized metrics, social impact remains much harder to compare, consolidate and communicate. New research by Axelle Guers, conducted within the i3-CRG laboratory at École polytechnique and drawing on observations conducted at Mirova, explores the structural challenges involved in comparing and aggregating social impact outcomes.
Impact investors face a dual challenge. On the one hand, they need indicators that are closely connected to each company's mission and activities. On the other hand, they need to report impact at portfolio level and compare investment opportunities across companies and sectors.
This creates an inherent tension.
A healthcare company may measure reduced waiting times for medical care. An education platform may track improvements in learners' confidence. A social inclusion organization may evaluate reductions in social isolation. Each indicator is relevant to the organization that uses it, yet these outcomes are fundamentally different and difficult to compare.
As a result, investors often rely on aggregate volume indicators, such as the number of beneficiaries reached or jobs supported. While useful, these metrics provide only a partial view of impact and reveal little about the nature, depth or quality of the changes experienced by beneficiaries.
1. The absence of comparable impact objectives - Social indicators are often highly specific to individual organizations and contexts. Without common reference points or shared benchmarks, it becomes difficult to assess whether different organizations have achieved similar levels of impact.
2. The challenge of prioritizing heterogeneous impacts - How should improvements in health be compared with improvements in education, housing or social inclusion? The research highlights that this question cannot be resolved through technical measurement alone. Any comparison inevitably involves normative choices about the relative importance of different social needs and outcomes.
3. Data heterogeneity - The same social phenomenon can be measured using different methodologies, varying degrees of rigor and different types of data. Similar-looking results may therefore rest on very different foundations, limiting meaningful comparison between organizations and investment opportunities.
4. The fungibility dilemma -Aggregation assumes some degree of substitutability. In environmental assessment, stakeholders generally accept that greenhouse gas emissions can be expressed in a common unit. In the social sphere, however, aggregating different outcomes raises far more complex questions. Can improvements in well-being be directly combined with improvements in employment outcomes? Can gains in one area compensate for weaker results in another?
These questions reveal underlying normative debates that cannot be addressed through methodological choices alone.
5. Differences in measurement boundaries - Organizations may define their impact perimeter differently. Some focus exclusively on direct beneficiaries, while others include families, local communities or broader stakeholder groups. As a result, differences in reported outcomes may sometimes reflect differences in measurement boundaries rather than genuine differences in impact.
Rather than advocating for a single universal indicator of social impact, the research identifies several avenues for strengthening comparability while preserving the richness and contextual relevance of organization-specific measurement approaches.
These include:
One of the key insights emerging from this research is that the complexity of social impact should not be viewed as a failure of measurement, but as a reflection of the reality being measured.
The diversity of social needs, outcomes and contexts makes social impact inherently multidimensional. As a result, the ambition to fully aggregate all social impacts into a single metric may remain out of reach.
Yet this does not prevent investors from making informed decisions.
The challenge is not necessarily to simplify social impact, but to make methodological choices explicit, acknowledge their limitations and ensure that impact assessments remain robust, credible and useful for decision-making.
As impact investing continues to grow, advancing these discussions will be essential to strengthening both accountability and impact management across the investment ecosystem.
The Barriers to Aggregating Heterogeneous Impact Indicators