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Standards of Evidence for Impact Investing

This paper introduces Nesta Impact Investments Fund and the standards of evidence we’ll be using to ensure our investments make a positive social impact

This paper introduces Nesta Impact Investments Fund and the standards of evidence we’ll be using to ensure our investments make a positive social impact.

Key findings

  • We use a 1-5 scale; 1 = a clear articulation of why a product or service could have a positive impact; 5 = evidence that it can deliver impact at scale.
  • We recognise the need to ensure that demand for evidence is appropriate to different stages of development, and that it doesn’t hamper innovation.
  • The Standards of Evidence will be used to inform our future funding decisions.

Impact investing is gaining ground. The prospect of being able to tackle social challenges while making a profit is an attractive proposition. But too often evidence of impact is missing. We need evidence to establish whether a product or service is benefitting those it sets out to serve, and then to focus investment on products and services that can make the most difference. To help us achieve this we have developed a new approach, Standards of Evidence for Impact Investing.

We have developed this new approach to help guide the decisions made by Nesta Impact Investments. This fund will be investing in high-risk or earlier-stage innovations where we intend to create value, not only in financial terms but also in terms of impact.

This short discussion paper introduces Nesta Impact Investments Fund and the Standards of Evidence for impact investing. We discuss why the Standards of Evidence were developed and the implications we hope they will have for our fund.

Authors
Ruth Puttick and Joe Ludlow

Authors

Joe Ludlow

Joe Ludlow

Joe Ludlow

Director, Impact Investment

Joe lead Nesta Impact Investments, a £17.6m investment fund for innovative social ventures in the fields of ageing, young people and sustainability.  Joe is a board member of Bethnal...

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Ruth Puttick

Ruth Puttick

Ruth Puttick

Principal Researcher - Public and Social Innovation

Ruth was Principal Researcher for public and social innovation. Ruth joined the Nesta policy and research team in 2009, working on a range of projects across innovation, investment a...

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