Roundtable 'Measurable Impact'

July 2, 2026

_{This report was originally written in Dutch. This is an English translation.}

How can you prevent impact investing from getting bogged down in spreadsheets, assumptions and complex frameworks? And how can you make social impact understandable to participants and end investors? During the round-table discussion ‘From Theory of Change to Measurable Impact and Financial Return’, experts discussed the future of impact investing.

By Daphne Frik

Is a Theory of Change essential for achieving measurable impact, or are we making impact investing unnecessarily complex?

Sasha Miller: ‘For us, a Theory of Change is essential. We were one of the founders of the Operating Principles for Impact Management and regard these as the basis for a high level of integrity in impact investing. You need to be able to explain what change you want to achieve, how you intend to achieve it and how you will measure it. At the same time, there is a strong demand in the market for ways to keep impact scalable and practical.’

Cherry Muijsson: ‘I see a Theory of Change as a business plan for impact. Particularly with long-term investments, you need a framework to hold yourself accountable. It helps to bring financial and non-financial objectives together. Without such guidance, impact can quickly become abstract.’

Marjolein Meulensteen: ‘A Theory of Change is important, but we don’t need to make it more complicated than necessary. Formulating a Theory of Change is, in essence, simply thinking about which transition you want to support. It doesn’t have to be a PhD thesis.’

Gert-Jan Sikking: ‘I agree. At PGGM, we distinguish between general sustainability and genuine impact investments. For impact, you need to be able to demonstrate in advance what contribution an investment makes and what wouldn’t happen without that investment. That should simply be part of the investment case.’

Eszter Vitorino: ‘A Theory of Change provides direction. Without it, you’re mainly just collecting data without knowing what you’re actually working towards. You need a sort of North Star.’

Vincent Triesschijn: ‘The theory is important, particularly to prevent “impact washing” when scaling up impact investing. If we want impact investing to make a material contribution to solutions for today’s social problems, then time is of the essence and scale is crucial.’

Boris van Warmerdam: ‘We all know how to calculate returns and risk. Impact needs to be integrated in exactly the same way. But there is still a great deal of uncertainty and a variety of definitions in the market. That is why, as a sector, we need to collaborate more closely to make impact investing a genuine part of professional investing and industry standards. Only then can you dispel the perception that impact investing automatically yields lower returns or is a separate niche.’

Do institutional investors sometimes make impact investing too complicated with long lists of requirements and extensive impact frameworks?

Triesschijn: ‘If, after applying all the filters and requirements, you’re left with no managers at all, then the list is simply too long. Of course you have to be critical, but proportionality is important.’

Vitorino: ‘You have to distinguish between minimum requirements and nice-to-haves. Otherwise, you’ll make it impossible for yourself.’

Sikking: ‘And not every investment needs to be an impact investment. In our 3D strategy, we weigh up return, risk and sustainability for every investment. Within that framework, we also have investments that meet minimum sustainability standards but do not otherwise make a specific positive contribution. That’s fine, as long as the risk-return profile is sound.’

Meulensteen: ‘You also need to remain flexible. Particularly with growth companies, the reality on the ground sometimes changes faster than your original Theory of Change. As an investor, you then need to be prepared to adapt.’

Perhaps we should sometimes simply recognise ecological and social value for what they are, rather than reducing everything to a figure in euros.

Triesschijn: ‘That’s why we sometimes talk about a sort of “Theory of Change light”. Not every investment requires the same level of detail.’

How do you prevent a Theory of Change from remaining primarily a paper exercise rather than a tool for driving real impact?

Triesschijn: ‘The biggest risk isn’t the theory itself, but its incorrect application. On paper, everything may seem perfectly sound, whilst during discussions or site visits you realise that the reality is very different.’

Sikking: ‘A Theory of Change must never be just a single paragraph in a document. You have to measure, report on and actively manage impact. Otherwise, it really does remain just a paper exercise.’

Triesschijn: ‘We always say: show what’s happening in the real world. What is a company actually doing with the money?’

Miller: ‘The investor’s role is crucial in this regard. For example, we’re investing in an outcome bond in South Africa focused on ecological restoration using spekboom vegetation. It’s a bond with a 14-year term, but that’s precisely why we organise annual meetings with scientists and investors to monitor progress.’

Vitorino: ‘Measurement often involves looking back, whereas a Theory of Change looks ahead. The two need to complement each other.’

Muijsson: ‘Precisely because impact investments are often held for the long term, you need to be able to check along the way whether you’re still on track.’

When is an investment truly impactful, and how does it differ from conventional sustainable investments?

Sikking: ‘Not every sustainable investment is automatically an impact investment. ESG or sustainability is often about limiting risks or reducing negative impact. With impact investing, you really need to be able to demonstrate that an investment consciously contributes to positive change that would otherwise not happen, or would happen less quickly.’

Triesschijn: ‘The key question remains: what would happen without this investment? That is also why we focus specifically on causality and on what an investment actually adds in the “real world”.’

Vitorino: ‘That is also what makes impact investing more complex than traditional ESG integration. It is not just about exclusion or risk mitigation, but also about whether capital actually helps to enable certain transitions or solutions.’

Miller: ‘That is precisely why a clear Theory of Change remains so important. Without such a framework, it becomes very difficult to distinguish between general sustainable investments and those explicitly aimed at social impact.’

Does impact need to be measurable within the term of an investment to actually qualify as impact investing?

Meulensteen: ‘Measuring output is essential, but the ultimate social outcome is often further down the line. Certainly with early-stage growth companies or healthcare investments, you sometimes only see the real impact – such as better care or lower emissions – years later. That’s why you also need to look at how an investment or a manager is already contributing today to a stronger ecosystem or to accelerating innovation.’

I see a Theory of Change as a business plan for impact. Particularly with long-term investments, you need a framework to hold yourself accountable.

Muijsson: ‘That also raises the question of which interim metrics you use. With nature restoration, the effects often lie beyond the investment horizon. So which indicators do you use along the way to be able to say something about progress? Do you distinguish between direct impact and potential long-term impact? These are important discussions within impact investing.’

Meulensteen: ‘Yes, we try to distinguish between current impact and potential impact. The latter is, of course, more difficult to calculate, which is why we do not currently report on it. But with many investments, particularly those relating to nature or innovation, the ultimate social outcome simply falls outside the investment’s timeframe. That is why you also need to be able to demonstrate what steps are already being taken along the way.’

Vitorino: ‘There’s a difference between direct, measurable impact and potential systemic impact. An infrastructure investment often yields immediate, measurable results, whilst an early-stage technology investment might only transform an entire sector at a later stage.’

Sikking: ‘We explicitly ask investment managers to set out quantitative expectations in advance. Of course, there are uncertainties involved, particularly with start-ups or innovative solutions, but it does help teams to think concretely about the possible outcomes and the contribution an investment can make. We then measure that impact over time. This makes impact an integral part of the actual decision-making process, just as risk and return are. If, for example, you later sell part of your position, this affects not only your financial exposure but also the impact you can claim.’

Miller: ‘Many social changes take time. That is why, as an investor, you must be prepared to look over longer periods.’

Triesschijn: ‘The most important thing remains that you can explain why the investment actually adds value.’

Should impact metrics primarily be relevant on a per-investment basis, or does the sector need more standardisation and aggregation at portfolio level?

Triesschijn: ‘Our clients often want a single, clear overview of impact, but in practice every investment has different objectives and metrics. This results in fragmented and technical reports that are difficult for retail investors to understand. That was precisely the question we asked ourselves: should you actually aggregate impact at portfolio level, or keep it relevant on an investment-by-investment basis? In theory, we all understand that you cannot use a single uniform metric for a highly diversified impact portfolio. An investment in sustainable buildings simply requires different indicators to an investment in healthcare or biodiversity. At the same time, clients do expect a clear, comprehensive overview. That is why we often work with primary and secondary objectives: a number of overarching indicators for the entire portfolio, supplemented by more specific metrics per fund or investment. ’

Van Warmerdam: ‘We are developing a framework that translates social impact into euros, based on methodologies also used by the Dutch government to quantify social value. Our aim is to provide a comparable overview of both positive and negative effects, so that impact can also be better aggregated at portfolio level. I believe this is important if we really want to make impact investing an integral part of the sector’s professional standards. It also helps to make impact investments more comparable with traditional investments. But I also think that the sector ultimately needs greater standardisation. Only in this way can we truly professionalise impact investing.’

Impact should not be seen as separate from returns, but should become part of how we assess risk, value creation and long-term returns.

Muijsson: ‘At the same time, impact is often very specific to the objectives of a particular investor. Pension funds have different priorities to family offices or insurers, and even within pension funds, preferences vary greatly. Many funds now conduct member surveys to better understand which themes are considered important. As a result, a bespoke approach remains important. After all, it’s not just about standardisation, but also about how you translate impact into the objectives of a specific portfolio. Consequently, a certain degree of bespoke tailoring will always be necessary. ’

Sikking: ‘And sometimes a figure doesn’t say much. If you say that an investment prevents 15 megawatt-hours of CO₂ emissions, it’s not immediately clear what that means. Is that a lot? Is that a little? That’s why storytelling helps. People understand much more quickly what an investment does if you explain that a project, for example, creates extra capacity in the healthcare sector, makes homes more sustainable or contributes to more renewable energy. That translation into the real world remains essential. I therefore also believe in a sort of 80/20 approach: of course you need quantitative data and impact measurements, but you must also be able to tell a comprehensible story that resonates with participants and private investors. We must be careful not to go overboard with a fixation on figures.’

Vitorino: ‘We therefore combine headline indicators with concrete case studies. Some metrics are simply only relevant to a specific sector. In agricultural investments, for example, soil quality is important, but you cannot meaningfully aggregate that with other asset classes. That is why we believe more in a combination of headline indicators and sector-specific metrics.’

Meulensteen: ‘If you try to reduce everything to one or two figures, you lose a lot of nuance and relevant information. We try to aggregate where possible, but we mainly look at impact metrics at the investment level.’

Triesschijn: ‘The danger of too much standardisation is that you try to assess very different investments in the same way.’

Miller: ‘Greater comparability would certainly help the market to grow further. Institutional investors, in particular, are often looking for more guidance and clarity on how impact is measured and reported.’

Should social impact be monetised to make impact investing more comparable with traditional investments?

Van Warmerdam: ‘I think monetisation can help make both positive and negative impact more visible. Ultimately, you want to arrive at a net social value. As mentioned, we are working on a scientifically underpinned framework in which social impact is expressed in euros. Consider, for example, the social value provided by homes with a communal space, by reducing loneliness and thereby healthcare costs. In this way, we aim to make impact more comparable with traditional investments, so that it can also be aggregated more effectively at portfolio level.’

Sikking: ‘Theoretically, I think the sector will move in this direction in the long term. This involves integrating externalities into investments and creating a sort of level playing field. But in practice, it’s still very complicated. First, you have to determine exactly what constitutes a positive or negative factor, and then you also have to assign a financial value to it. That leads to discussions about assumptions. For example, I once heard that child labour was valued at a certain amount in euros. But who decides that amount? There’s a great deal of subjectivity involved. Intellectually, I find it interesting, but in practice I’m still cautious about it.’

Measurement often involves looking backwards, whereas a Theory of Change looks forwards. The two need to complement each other.

Triesschijn: ‘We’ve also experimented with impact valuation in euros, and it’s certainly promising. You do have to be careful about misapplication, though. Job creation, for example, is quickly assigned a high social value in such a model, whilst almost every company creates jobs. This makes it difficult to distinguish between regular economic activity and genuine impact. We’ll continue to monitor the development of the methodology, and when applying it, care and transparency are essential.’

Vitorino: ‘There is indeed a nuance there. In some cases, for example in the healthcare sector, retaining staff or reducing workload can actually have an enormous social impact, because there are major shortages there. But that also shows just how context-dependent impact actually is.’

Meulensteen: ‘I also wonder whether everything really needs to be translated into financial terms. Perhaps we should sometimes simply recognise ecological and social value for what it is, rather than reducing everything to a figure in euros. Of course, monetisation sometimes helps to make impacts comparable, but you also run the risk of oversimplifying the complexity of social or ecological value.’

Miller: ‘That’s why we tend to opt for multiple impact metrics used in parallel, depending on the theme. Climate, nature, affordable housing and community development all require different indicators. That makes it difficult to ultimately reduce everything to a single figure, but it often aligns better with the underlying investments.’

Triesschijn: ‘That may well be the conclusion: there is no dogmatic approach or single silver bullet. It’s more complex than that, and part of it is non-financial.’

Muijsson: ‘Furthermore, the question of how you actually price externalities always remains heavily dependent on regulation and assumptions. Many investors hope that more data will automatically lead to better decisions, but it’s also about how you incorporate regulation, transition risks and physical risks into the investment case and portfolio construction.’

Are geopolitical developments giving rise to new sustainability and impact themes alongside the SDGs?

Sikking: ‘We use the SDGs as a framework for positive contribution and impact investments, but those goals officially run until 2030. At the same time, the world is changing rapidly. Geopolitical developments are giving rise to new themes such as energy security, defence and strategic infrastructure. Consider, for example, the debate on European independence, energy supply or digital resilience. This also raises the question of which themes will form part of the next generation of sustainability and impact objectives. Perhaps the focus will then shift more towards societal resilience and strategic autonomy, as described, amongst other things, in the Draghi report.’

Miller: ‘What strikes me most is how far we still are from the SDGs. At international meetings, it is becoming increasingly clear just how large the funding gap still is to actually achieve those goals. Furthermore, you see that governments have fewer resources available and that philanthropy alone cannot fill that gap either. This only makes the question all the more urgent: how can we mobilise much more private capital towards impact investments?’

This is ordinary people’s money. If they don’t understand what is happening to their assets, you’ll face resistance.

Triesschijn: ‘It’s also about transparency. People understand issues such as energy security, child labour or affordable healthcare very well, as long as you make it concrete and can demonstrate what an investment actually changes. Furthermore, the return must be good. I believe that is also crucial for maintaining support for SDG targets in investments.’

Sikking: ‘Pension funds must invest in the interests of their members, and members are now also paying closer attention to social stability. It is no longer just about financial returns, but also about the kind of society people will be retiring into. Issues such as energy security, healthcare and geopolitical stability are playing an increasingly significant role in this.’

Muijsson: ‘The question is also how to translate new supply chain risks into asset allocation and portfolio construction. This is not just about sustainability, but also about transition risks, physical risks and strategic dependencies in food chains and healthcare. Investors must therefore gain an ever-better understanding of how these developments influence their long-term returns and portfolios.’

Vitorino: ‘You can see that systems thinking is becoming increasingly important. Impact is no longer just about individual projects, but also about broader societal resilience. We’re seeing that the focus is increasingly on how investments contribute to larger-scale transitions and to the functioning of systems, for example in the areas of energy, healthcare or infrastructure.’

Should the definition of fiduciary duty be broadened to explicitly include social and environmental impact, or was Thierry Aartsen right that pension funds should focus exclusively on financial returns?

Vitorino: ‘Impact investments must continue to perform financially, but in my view, fiduciary duty is also about the long term. You cannot view climate risks, biodiversity loss or social instability in isolation from financial returns: such developments also have an impact on economies, companies and portfolios. That is why I think it is too narrow a view to consider fiduciary duty solely in terms of short-term financial returns.’

Meulensteen: ‘If you ignore systemic risks such as climate change, you are actually failing in your fiduciary duty.’

Muijsson: ‘The problem is often one of framing. All too often, people still act as if impact investing automatically comes at the expense of returns. That is simply not true. Of course, you need to consider risks, tracking error and the role of impact strategies within a broader portfolio, but issues such as climate change, biodiversity and social stability also have financial consequences.’

Sikking: ‘In the Netherlands, pension legislation already stipulates that pension funds must take non-financial factors into account. So that has actually been part of fiduciary duty for a long time.’

Meulensteen: ‘And members also want to be able to retire into a liveable world.’

Sikking: ‘PFZW conducts a great deal of research amongst its members. And what does it show? Many people consider sustainability important, even if it might cost a little extra. Other members want the highest possible financial return. The pension fund must take this information from its members into account when drawing up its investment policy.’

We strongly believe in storytelling. A story about additional healthcare capacity, renewable energy or affordable housing is much easier to understand than complex impact tables.

Miller: ‘In the United Kingdom, fiduciary duty is also currently being reviewed. Approaches are changing in various markets.’

Is the idea that impact investing comes at the expense of financial returns a misconception?

Muijsson: ‘Yes, that is a misrepresentation of the facts. Of course, impact investing sometimes requires a longer time horizon, different benchmarks or a different risk budget, but that does not automatically mean lower returns. Many discussions are still conducted in too black-and-white a manner, as if investors have to choose between financial returns and social impact. Our research shows that markets are already factoring water scarcity and more efficient water use into company valuations. Investing in water solutions is, in fact, also an impact theme.’

Vitorino: ‘The impact investing market is rapidly becoming more professional, making it increasingly important for investors to be able to identify the winners within the sector. For fund managers, this means that a strong manager selection team is essential for identifying standout players and assessing them convincingly. Impact and returns go hand in hand and actually reinforce one another.’

Triesschijn: ‘We’ve had years in which impact mandates actually outperformed traditional investments, and years in which the opposite was true. Over longer periods, the performance is often much closer. This also shows how much these kinds of discussions depend on the chosen time frame. If you look only at short periods or at the best-performing share indices at that moment, you quickly end up with a skewed picture. Ideally, investors should have a longer-term horizon and look beyond the cycle.’

Sikking: ‘At the same time, you have to remain realistic. Some high-impact projects simply offer too low an expected return for the risk involved. In such cases, we still won’t invest in them. Pension funds, of course, remain responsible for the financial interests of their members.’

Miller: ‘For many impact strategies, we apply the same return targets as for conventional strategies. This is important to make it clear that impact investing is not philanthropy. It involves investments that create both financial and social impact.’

Muijsson: ‘Many discussions also arise because investors do not pay sufficient attention to risk-adjusted returns or to the role of impact within a broader portfolio. Some impact strategies, for example, can actually help to reduce certain transition risks or long-term risks.’

Triesschijn: ‘Benchmarking also plays a role in this. The question should actually be broader: what is the role of such an investment within the overall portfolio and in the longer term?’

Van Warmerdam: ‘As long as impact investing is viewed as something separate or idealistic, that debate about returns will keep resurfacing. That is why it is so important for impact investing to become more professionalised and to be integrated more fully into mainstream investment processes. Impact should not be seen as separate from returns, but should become part of how we assess risk, value creation and long-term returns.’

Are traditional benchmarks still suitable for assessing impact investments?

Triesschijn: ‘Benchmark thinking doesn’t help. Many impact strategies simply have a different risk profile, a different time horizon or invest in different sectors to mainstream benchmarks.’

The sector needs to explain much more clearly that impact investing is not the same as philanthropy.

Sikking: ‘It is a fundamental challenge for the entire sector. Traditional benchmarks are based on the world’s largest companies, not on sustainability or social value. As a result, they do not always align well with the objectives of impact investing.’

Muijsson: ‘Many investors are therefore looking for supplementary benchmarks that already incorporate climate risks, transition risks or sustainability choices. This also helps to better explain investment decisions to boards and participants.’

Miller: ‘We see that institutional investors are still grappling with the question of where exactly impact fits within asset allocation. Is it a separate category? Or should impact be integrated across the board? Our surveys of institutional investors worldwide show that approaches are changing.’

Vitorino: ‘As long as performance is assessed solely in financial terms, the discussion remains oversimplified. Ultimately, you need to look at financial and social outcomes together. Otherwise, you miss out on a significant part of the value that such investments aim to create.’

Triesschijn: ‘For retail investors, an absolute long-term comparison sometimes works better than complex relative benchmarks. Many people simply want to understand what an investment yields in euros and what it achieves in social terms.’

Sikking: ‘If you can explain that an investment not only delivers a financial return but also, for example, creates extra capacity in healthcare or contributes to the energy transition, that appeals to people far more than purely financial investment information.’

How can investors better explain impact investing to participants and end investors?

Triesschijn: ‘This is ordinary people’s money. If they don’t understand what’s happening to their assets, you’ll meet with resistance.’

Sikking: ‘That’s why we strongly believe in storytelling. A story about additional healthcare capacity, renewable energy or affordable housing is much easier to understand than complicated impact tables. Of course, you need data, but you also need to be able to tell a clear story that resonates with participants.’

Vitorino: ‘It needs to be made tangible. People want to know what their money is actually changing. That means you shouldn’t just show abstract figures, but also real-life examples.’

Muijsson: ‘Participant surveys also help with this. In recent years, many pension funds have done a much better job of identifying participants’ actual sustainability preferences. This also makes it clearer which themes are considered socially relevant.’

Miller: ‘The sector needs to explain much more clearly that impact investing is not the same as philanthropy. It is, in fact, about investing with both financial and social returns. Many people still think that “impact” automatically means you have to sacrifice financial returns.’

Van Warmerdam: ‘Greater transparency also helps to add nuance to the public debate. This is particularly important now that there is growing political resistance to ESG and impact investing. The better you can explain what these investments actually achieve, the stronger the public support will remain.’

Meulensteen: ‘Ultimately, participants don’t just want a good pension; they also want a liveable society in which they can enjoy that pension. It is up to us as investors to be transparent about the choices we make.’

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