Thought
Navigating Impact Investing: Building a Robust Strategy Without a Unified Framework
Impact investing is moving from aspiration to expectation. For real asset investors, the question is no longer whether environmental and social outcomes matter, but how credibly they can be defined, measured and evidenced.
As capital markets, regulators and society place greater scrutiny on the real-world effects of investment, impact is becoming a practical test of value creation, real-world outcomes and trust.
The investors who can turn ambition into measurable action will be better positioned to attract capital, manage risk and demonstrate the positive role of the built environment in the transition to a more sustainable and inclusive economy.
What is impact investing
Impact investing moves beyond traditional finance to accelerate a more sustainable and inclusive economic shift. It is defined by the pursuit of measurable social and/or environmental benefits, alongside financial returns.
Unlike traditional models, impact investing requires evidence of beneficial effects, proving a clear link between capital and positive change. To ensure these investments achieve their goals, rigorous reporting is essential.
Finding the right methodology to identify, measure, and report against specific impacts is the cornerstone of a successful strategy.
Market trends and current landscape
Despite a decline in recent general fundraising trends, Impact Assets under Management reached a record high in 2025[1]. Investors remain committed to a ‘double bottom line’ approach, deploying substantial capital into strategies that prioritise both positive societal outcomes and robust financial returns.
Europe and Africa have represented a larger share of impact fund closings compared to the broader private funds universe since 2008. Notably, Real Assets represent a significantly higher share of both the number of funds and total capital raised within the impact universe than in traditional private funds.
The evolution of universal standards
The real estate and broader investment markets currently lack a single, globally recognised standard for measuring and reporting social impact. While voluntary frameworks such as the Institut de la Finance Durable (IFD), the Global Impact Investing Network (GIIN) and the Impact Principles provide valuable guidance, they have yet to be consolidated into a unified regulatory framework.
However, the regulatory landscape is evolving. The revised SFDR proposal, published in November 2025, introduces a new impact category for funds seeking to generate positive societal and environmental outcomes. Although the detailed criteria are still being developed, the proposal lists, within its broader ESG category, investments that “favour undertakings or economic activities with a proven positive track record in terms of processes, performance or outcomes related to sustainability factors.” While the proposal is expected to be negotiated between the European Parliament, the Council and the European Commission starting in September, with SFDR 2.0 anticipated to apply only from mid-to-late 2029, this represents an important step towards the formal recognition of impact investing within the European regulatory framework
Impact investing in practice
While no single global standard exists, most frameworks align on three key pillars clearly outlined by the IFD as follows:
- Intentionality: The investor’s explicit objective to generate social or environmental benefits alongside financial returns.
- Additionality: The specific contribution – such as technical expertise, partnerships, or specialised support – that creates an impact beyond what would have occurred through capital alone.
- Measurement: The rigorous evaluation of social and environmental effects against the original intentions.
Measuring impact is only possible through Impact Key Performance Indicators (KPIs) which must be distinguished from standard ESG metrics. While ESG metrics often focus on status, Impact KPIs focus on change and must demonstrate improvement against a specific baseline.
An example of Impact KPIs could be the average reduction in tenant utility bills compared to their previous homes or following energy efficiency upgrades (based on actual measurements), while a standard ESG KPIs could be the percentage of energy-efficient assets within a portfolio or the percentage of assets meeting EU Taxonomy standards. Impact KPIs therefore act as a bridge between real-world outcomes and financial value. For example, energy, carbon, wellbeing, affordability and community linked KPIs can help investors identify where positive impact may reduce costs, protect income, improve occupier demand, de-risk planning and strengthen long-term asset resilience.
To demonstrate impact, we must understand the “Why”. Every project should be evaluated through its baseline (the original need or objective), its additionality (unique value brought beyond funding) and its potential impact KPIs (the specific indicators that prove progress).
Measuring impact requires a clear “starting point”. Without a pre-project study, survey, benchmarking or needs analysis, it is nearly impossible to select the right KPIs or prove that a specific social or environmental problem is being solved. In practice, surveys are an effective way to measure progress over time, though they require careful KPI selection to ensure high response rates. To maintain relevance throughout the life of an investment, KPIs should be categorised into short, medium, and long-term goals.
Impact investing is not philanthropy; it is a sophisticated investment model built to generate revenue while positively influencing society. Choosing impact does not mean accepting reduced income, it allows companies to align their portfolios with their core convictions. This is particularly relevant for the Real Estate sector, where investors have a direct influence on both environmental and social outcomes – a theme often overlooked but deeply relevant to the built environment.
In real estate, this could mean investing in a retrofit programme that reduces operational carbon while improving occupier comfort, developing affordable or inclusive workspace that supports local employment, or funding community infrastructure that improves access to essential services. In each case, the impact is not simply the asset or intervention itself, but the measurable change created for people, places and the environment.
Ready to move from impact ambition to measurable outcomes?
EVORA helps real asset investors define credible impact strategies, identify the right KPIs, establish baselines and build reporting frameworks that stand up to investor, lender and regulatory scrutiny.
Get in touch with our team to explore how impact investing can support both long-term value creation and positive environmental and social outcomes across your portfolio.
