Impact emerges from the collective efforts of investors, entrepreneurs, partners, and other stakeholders. Consequently, impact attribution remains challenging, though several approaches can help bridge the metrics gap, as Lisa Hehenberger and Willemijn Verloop of Rubio Impact Ventures observe.
Looking at all reported impact metrics, you’d think we’ve solved the world’s biggest challenges overnight. But as we all know, reality tells a different story.
Most impact investors attributed 100% of a portfolio company’s impact – an approach that results in inflated impact figures and an overly optimistic view of progress toward global goals like net zero and the SDGs.
We have always aimed to push the boundaries of impact measurement. Since 2015, Rubio Impact Ventures has invested in over 40 early-stage companies, driven by a commitment to people and planet. But we’ve recognised a critical gap in our approach – a lack of a robust method to fairly attribute impact.
Therefore, to refine our understanding, we set out to explore key questions: what are current perspectives on attribution? And, which models exist and how do they reflect early-stage investors’ contributions?
The attribution challenge
Contribution refers to the outcomes relative to what likely would have occurred anyway (Impact Frontiers). Attribution takes it a step further – it attempts to link activities to these outcomes, implying causality. For impact investors, this means understanding how their distinct efforts created social or environmental impacts.
This is where it gets tricky, as in reality, impact is rarely the result of a single actor – it’s almost always a collective effort shaped by investors, entrepreneurs, partners, and various stakeholders.
To give this some structure, Project Frame distinguished two types of attribution: ‘Value chain attribution’, which distributes credit across contributors throughout the value chain, and ‘Capitalisation attribution’, which allocates credit among equity owners of the company. For now, we will focus on the latter.
Why attribution matters
One of the few reports that really digs into attribution for impact investors is a 2017 report by the Donor Committee for Enterprise Development (DCED). It highlighted what we suspected – attribution holds great promise, but it’s anything but straightforward.
The report highlights that attribution can improve transparency and accountability, validates additionality, guides resources toward the most impactful interventions, and fosters trust through honest and credible reporting.
Yet, despite its potential, attribution remains difficult to implement. The challenges include methodological complexity, data limitations, a lack of robust models, and overlapping contributions from multiple actors.
Diverging opinions
When we spoke to impact funds and industry experts, we found strong opinions on both sides of the attribution debate.
Advocates argue that even imperfect attribution models improve transparency and accountability – and that the field must urgently prioritise research for robust solutions. Critics push back, pointing to data gaps and complex methodologies, warning that attribution risks distracting from what matters most: creating impact.
Four approaches to impact attribution
Inspired by methods in carbon accounting – where frameworks like PCAF and Project Frame provide clear methodologies for allocating responsibility for greenhouse gas emissions – we identified four attribution approaches tailored specifically to impact investing:
- Contribution, not attribution: focuses on transparent communication about the investor’s support role without attempting to measure specific shares of impact.
- Pros: Honest about impact and simple to implement.
- Cons: Avoids calculating attribution, limiting its use for transparency, accountability, or decision-making.
- Prorating on equity: Impact is allocated based on the investor’s equity share in a company
- Pros: Simple, easy to implement, and directly linked to financial investment.
- Cons: Ignores non-financial contributions and excludes debt and grant providers.
- Prorating on capital: Impact is allocated based on the proportion of total capital contributed, including equity, debt, and grants.
- Pros: Inclusive of equity, debt, and grants.
- Cons: Complex to acquire all the data and excludes non-financial contributions.
- Prorating + non-financial factors: This model builds on capital-based attribution by adding weight for non-financial contributions, such as strategic guidance, catalytic roles, and additionality.
- Pros: Recognises early-stage investor risks, catalytic effects, and contributions beyond capital.
- Cons: Lacks standardised methodologies and relies on subjective factors, which complicates implementation.
The missing piece: the role of non-financial contributions
Unfortunately, our research revealed a glaring gap: existing models fail to account for the non-financial contributions that are often crucial to a venture’s success.
As early-stage investors, our impact extends far beyond providing capital. We take on significant risks during unproven phases, act as catalysts for follow-on funding, and provide crucial support like strategic guidance, capacity building, and access to networks. These contributions frequently shape a company’s ability to scale and thrive.
While some investors have attempted to quantify these non-financial contributions —such as tracking engagement hours or using scoring systems (DCED, Impact Europe) – no widely accepted framework exists. We believe that addressing this gap is crucial to creating a more complete and accurate picture of impact attribution.
Our path forward: A humble first step
After careful consideration, we’ve decided to start with the prorating on equity model. While imperfect, it provides a clear, implementable foundation for impact attribution. In our latest impact report, we have transparently applied this approach, acknowledging its limitations.
We’re sharing this journey not as definitive experts, but as active participants in the evolving impact investing field. Our approach is a first step, not a final solution. We invite other funds, researchers, and practitioners to join us in refining how we measure and attribute impact.
Lisa Hehenberger is a professor at the Esade Centre for Social Impact and member of the impact advisory board at Rubio Impact Ventures. Willemijn Verloop is founding partner at Rubio Impact Ventures.
Sources: This analysis draws from research by DCED, Project Frame, PCAF, Impact Europe, Impact Frontiers, and Wellington, as well as extensive interviews with impact investing practitioners.
