ABSTRACT
Impact investing at its core is about explicitly considering an investment's social and/or environmental impact in the investment decision process. The social return on investment methodology monetizes the various impact components and sets the financial value of such monetization in relation to the financial investment made. The contextualization of impact metrics is the biggest challenge for the definition of universal impact metrics and it is amplified by the diverse use of impact measurement by various stakeholders within the impact investing domain. With the emergence of payment-by-results instruments such as social impact bonds that link monetary flows to social impact results, impact measures have found their way into economic decision-making processes. Double-bottom-line thinking, initially meant to be a complement to the financial return objectives of a business, ultimately not only deprives social enterprises of any growth perspective but also even endangers their social mission and their business model as a whole.
