Impact measurement and management, or IMM, has advanced significantly in recent years, with improved frameworks, standardized metrics and more discipline. But in practice, IMM still produces data that is often fragmented, incomparable and disconnected from decision-making. More than 90% of impact investors still struggle to capture meaningful impact data.
Much of the debate about fixing IMM has focused on investor frameworks and decision-making processes. Those matter. But IMM will continue to underperform if it is not also designed to work for the companies expected to produce the impact. For many businesses, IMM still feels like compliance — expensive to maintain, loosely connected to strategy and of limited use in managing performance or risk. Investors increasingly recognize this problem and offer to cover data collection costs or use AI to simplify reporting. That can help, but it misses the opportunity to embed IMM into business operations so companies can use it to make better decisions and deliver stronger outcomes.
That was the starting point for a recent collaboration between Dalberg Advisors and Leaps by Bayer, the corporate venture capital arm of Bayer. Leaps by Bayer asked Dalberg to support its portfolio companies in developing an impact narrative, tracking impact and reporting on it in ways tailored to each company’s business model, stage and needs. A core objective was to ensure that IMM reinforced business strategy and was seen as a source of value rather than an added burden.
Through this work, we have seen three practical ways to make IMM more useful for companies: Link it to business value, integrate it into existing operations, and tailor it to different kinds of businesses.
Link IMM to business value
Corporate sustainability offers an important parallel. Two decades ago, sustainability was treated as a reputational issue or a nice-to-have. Today, many companies see it as material to growth, resilience and competitiveness. Leaders like Unilever, Danone, Nestlé and Patagonia have built this mindset into their DNA, and outperformed because of it. Unilever’s sustainable living brands have grown 50% faster than others. Nestlé’s net-zero push has led to major supply-chain investments, from planting trees in cocoa and coffee regions to reducing climate vulnerabilities. Across industries, sustainability now drives growth, cost savings, valuations, capital access and talent retention.
IMM needs a similar shift. Companies are more likely to invest in impact measurement when they can see how it supports product differentiation, customer acquisition and risk management.
That fact has been particularly clear in our work with ag-tech start-ups. Many investors want these companies to quantify long-term effects on greenhouse gas emissions, ecosystem health or farmer income. But for a resource-constrained start-up, those outcomes can feel far removed from the immediate pressures of R&D, fundraising and growth.
By linking short-term business priorities to long-term impact through a clear theory of change, IMM becomes more relevant. It helps founders understand how business activities translate into impact outcomes — and how better impact data can inform product positioning, customer engagement and growth. When impact measurement becomes part of business intelligence, IMM shifts from compliance to decision support.
Integrate IMM into business operations
If IMM is to support active management, it needs to be built into existing strategic planning systems.
Most companies already plan around strategic objectives and key results, or “OKRs.” We’ve found it effective to anchor IMM in these systems: Align “activities” in a theory of change with operational priorities, and treat “outputs” as OKR targets (like launching a new product or forming partnerships). That way IMM becomes part of the strategy, not a parallel track. Outputs tracked through OKRs can be tied logically to standardized (e.g. IRIS+) outcomes (e.g., each product sold reduces water use). This approach brings IMM into strategy and operations, where managers can see how day-to-day decisions shape eventual outcomes.
Tracking outcome-level results – like emissions reduced or farmer income gains – is where investors or donors can support field research or promote the use of reliable third-party data. But that data should also inform business learning and better management.
And companies do not need to measure every outcome across a full theory of change. A better approach is to focus on a few priority impact pathways aligned with evolving business goals. That creates room for testing, learning, and iteration.
Tailor IMM to business type and stage
IMM should also be tailored to the company’s business model, impact ambition and stage of growth.
Some companies are primarily focused on avoiding harm; for them, ESG-style monitoring may be right. Others generate positive externalities while balancing strong commercial pressures. In these cases, IMM can help clarify impact pathways and trade-offs, but it must be right-sized to the company’s ambition. A smaller set of firms are explicitly mission-driven, with impact tightly woven into the business model itself. These companies often have the strongest reason to use IMM proactively because impact performance is central to commercial success.
Growth stage matters as well. Start-ups are often motivated by differentiation, fundraising and founder-led purpose, but operate with limited time and resources. Their IMM systems need to be lean, focused, and closely tied to commercial priorities. Ag-tech start-ups, for example, often prioritize metrics such as water or fertilizer savings because those data points directly support customer value propositions and sales conversations.
As companies grow, they can expand their IMM approach, tracking more outcomes, collecting more primary data or broadening the impact story across markets.
Established corporations face different incentives, including customer loyalty, brand credibility, regulatory expectations and supply-chain resilience. Here, IMM often aligns with sustainability teams. When done well, the business case is powerful. For example, Danone credits its health-oriented portfolio under the Renew Danone strategy with driving resilience and growth. Patagonia’s impact storytelling sustains exceptional loyalty with minimal marketing spend. In these cases, impact measurement reinforces accountability and strengthens competitive advantage, motivating companies to manage for greater impact.
Where to next?
IMM can be a powerful tool for improving real-world outcomes, but it will not deliver on that promise unless companies see clear value in using it. That means moving beyond better frameworks alone toward systems that are practical, proportionate and integrated into how businesses actually operate. If we want IMM to shape outcomes, we need to design it for the companies making daily decisions that determine whether impact happens at all.
Rachel Keeler is a senior project manager at Dalberg. Nicki Saee is a digital and event marketing manager at Leaps by Bayer. Denise Boehme is a director of portfolio strategy and reporting at Leaps by Bayer.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
