How methodologies cope with the real world: What is the IEF impact framework?

Ākina Director of Invest, Jackson Rowland, shines a light on the frameworks used by New Zealand’s first impact investing fund. How do they determine if the businesses they’re looking to invest in will make a positive impact?

As part of the management team of New Zealand’s first impact investing fund, the Impact Enterprise Fund (IEF) I can comfortably say the question I’m asked the most is ‘how do you measure that impact stuff?’ And understandably so. Impact investing is still a relatively new way of investing around the world, and is proving to be an increasingly effective way to deliver both meaningful financial returns and meaningful impact. Fundamental to doing this is using a robust framework that structures and guides the impact side of the analysis, and enables consistent and comparable discussion. So we thought we'd share more information on what framework we use, and how we use it.

Before we do, some context. Starting with the impact investing market. In short, it’s growing rapidly. Latest estimates of market size is that it has over $500 billion assets under management, up from around $230 billion the year before, and showing no signs of stopping. And, as more and more data is available on these investments, we’re seeing that the return profile of impact investments are comparable to traditional investments. 


Source: GIIN Annual Impact Investor Survey 2019

Impact investors are contributing to real social and environmental change so this growth should be no surprise. And this is at a time when there simply isn’t enough money being dedicated to tackling the crises facing the world, despite the fact that many of these can be solved via profitable business models. But, we’ll save that rabbit hole for another day.

New Zealand is absolutely on this journey of growth as well. Since the Impact Enterprise Fund launched two years ago, we’ve seen NZ’s third impact investing fund come to market (see Purpose Capital Impact Fund for more information), and more and more significant investors including impact investments in their portfolio. Not to mention the growing demand for impact investment from the ever maturing social enterprise sector in New Zealand. It is an exciting time for impact investing to say the least.

So how does the Impact Enterprise Fund consider the impact of its investments? Firstly, a couple of opinions:

  1. We don’t even try to determine the financial value of impact. While we understand the desire for one metric to measure success, the impact at its face value is more meaningful to us. And we believe it should be more meaningful to the world. So while it is much harder to compare ‘30 people are no longer pre-diabetic’ to ‘100 tonnes of Undaria (seaweed) removed’ than the financial value of each of these, we’re happy with the story those measures tell.

  2. We try to be evidence informed. We consult experts and we look at research results, government data and case studies demonstrating what’s worked to help us assess a venture’s theory of how their activities contribute to change. We think about whether the venture’s desired impact is needed, whether it is aligned with community objectives and whether it is likely to contribute to positive system change. For example, research says investment in a child’s first 1,000 days leads to significant long-term positive wellbeing.

Importantly, these are only opinions. I’ve talked to many people who have different opinions, for very good reason. If you’d like to share yours, feel free to get in touch by emailing me at This is the approach we’ve taken after much consideration, and so far, we’re really happy with how it’s going. 

The Framework

In order to consider and compare the impact of businesses seeking our investment, we rely on the Impact Management Project (IMP). The IMP is the leading impact investing convention internationally, created through significant engagement with stakeholders within the sector with the goal of creating a consistent way for impact to be discussed and compared. 

To do this, it has identified 5 different dimensions of impact:


The IEF used this framework to discuss and understand what sorts of impacts we were looking to achieve - what were our intentions - and then understand how this might look based on the dimensions the IMP set out. The green bands below show the outcome of this, and what types of impact we believe is most suitable for our Fund. 


To apply this, we ask each organisation seeking investment to complete our ‘Impact Model Template’, which gives us a sound overview of the types of impact they’re creating. We then undertake thorough impact oriented due diligence on businesses and in the process work with them to align their impact to the IMP framework in order to understand their alignment with us. 

By way of example, below is how we’ve considered Waikaitu, our second investment, based on this framework. Importantly, the below diagram is a cumulative view of the three core impacts they generate: managing Undaria, improving soil quality, and growing food supplies (each of which we analysed on their own initially).


As you can see, Waikaitu has a number of impacts, all of which generally fall within our preferred criteria. The ‘what’ dimension is also the appropriate place to highlight which of the Sustainable Development Goals (or any other frameworks, such as the recently released IRIS+) that some investors may also refer to in addition to the IMP.

One of the most important aspects of the IMP is the ability to also set really clear impact goals. Just like a traditional business would set financial goals, our investees will also have impact goals because of the primacy that has to the success of the business. The IMP dimensions create a clear way to identify where the opportunities for improvement are, and then you can indicate on the sliders what those impact goals are. Waikaitu have a number of impact oriented goals, one of which is confirming the efficacy of some of their new products through a stringent set of trials. Once these are complete, this will reduce the ‘risk’ dimension even further, as demonstrated below in yellow, as they will be even more confident that their products produce positive impact. 


As our portfolio grows, we will continue to align new businesses to this framework, and update existing investees' sliders as their impact evolves. While identifying exactly where within the slider the impact best sits is no science, it does enable really clear conversations across portfolio companies as we start to question, for example, whether the beneficiaries of company A’s impact are more well served than the beneficiaries of company B.

We have found the IMP to be a really helpful framework for us, and would encourage you to explore it for your own impact investments. And when you settle on a framework, hold it lightly and continue to evolve it. We have to respond as the thinking in this space, and the world around us, evolves too. If you have any questions or comments feel free to contact me at, or visit the Fund’s website for more info.

Jackson Rowland is Director of Ākina Invest and member of the Impact Enterprise Fund Management team. Ākina is one of the founding partners of the Impact Enterprise Fund.