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Principles for impact investments: practical guidance for impact measurement, assessment and valuation

Author

Listed:
  • Timo Busch

    (University of Hamburg)

  • Eric Pruessner

    (Advanced Impact Research GmbH)

  • Hendrik Brosche

    (University of Hamburg)

  • Christina Bannier

    (Justus Liebig University Giessen)

  • Young-Jin Choi

    (Vidia GmbH)

  • Gunnar Friede

    (DWS Investment GmbH)

  • André Höck

    (EB - Sustainable Investment Management GmbH)

  • Roland Kölsch

    (F.I.R.S.T. e.V.)

  • Philipp Krüger

    (University of Geneva)

  • Michael Schmidt

    (Sustainable Finance Advisory Committee of the Federal Government)

  • Judith Ströhle

    (University of St.Gallen)

Abstract

Impact investments have gained tremendous recognition among investors as well as policy makers in the last years. However, specific details about impact investments are not well understood yet. Specifically, academic research about the magnitude, life cycle, and tradeoffs of impact is still in its infancy. This paper provides practical guidance by developing principles for critical topics of impact measurement, assessment, and valuation using an exploratory approach. Questions that will be tackled include, among others: What is a significant positive company impact (impact magnitude)? Can impacts be transferred between investors (impact life cycle)? How should tradeoffs between impact categories be handled (impact tradeoffs)? The paper proposes 16 principles that provide answers to these and other questions, illustrates their real-world significance through case studies, and provides a discussion of their implications and limitations. It is, however, only one step and much more work is required to standardize the measurement, assessment, and valuation of impact in impact investments. Overall, this paper suggests important steps for this standardization process.

Suggested Citation

  • Timo Busch & Eric Pruessner & Hendrik Brosche & Christina Bannier & Young-Jin Choi & Gunnar Friede & André Höck & Roland Kölsch & Philipp Krüger & Michael Schmidt & Judith Ströhle, 2025. "Principles for impact investments: practical guidance for impact measurement, assessment and valuation," SN Business & Economics, Springer, vol. 5(5), pages 1-26, May.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:5:d:10.1007_s43546-025-00796-w
    DOI: 10.1007/s43546-025-00796-w
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    References listed on IDEAS

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    1. Anjila Wegge Hjalsted & Alexis Laurent & Martin Marchman Andersen & Karen Holm Olsen & Morten Ryberg & Michael Hauschild, 2021. "Sharing the safe operating space: Exploring ethical allocation principles to operationalize the planetary boundaries and assess absolute sustainability at individual and industrial sector levels," Journal of Industrial Ecology, Yale University, vol. 25(1), pages 6-19, February.
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    4. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 351-351.
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    More about this item

    Keywords

    Impact measurement; Impact investing; Sustainable finance; ESG;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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