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Nesta Impact Investments – Impact Strategy Audit Report

Itad conducted an Impact Strategy Audit of Nesta Impact Investments (NII). This assessed their use of the strategy and compared it to best practice in the industry.

Nesta Impact Investments 1 Limited Partnership (NII1) is a £17.6m venture capital fund managed by Nesta Impact Investments that invests in innovative, high-growth businesses seeking to address major social problems. NII has three focus areas: education, health and communities. NII is backed by Nesta, an innovation foundation working in the UK and globally. NII is committed to supporting social ventures to deliver on their mission.

NII1 was one of the UK’s first impact investment funds, set up in 2012. Since its inception it has been committed to a rigorous understanding of the social impact of its investments: NII believes that measuring and communicating social impact with integrity is critical for building confidence in impact investing as a sector. Its approach has been to provide dedicated technical assistance to its portfolio to increase the capacity of investees to measure, report on and react to social impact measures.

After five years of investment experience, NII has refreshed its approach to IMM including in 2016/17 developing and subsequently publishing a new Impact Strategy. Based on lessons learned over the years, NII has expanded its approach to impact risk and built a more structured and consistent approach to assessing impact across the portfolio.

NII commissioned an ‘Impact Strategy Audit’ to further cement NII’s commitment to rigour and transparency. NII’s aims of the audit were as follows, to:

  • give investors confidence that NII’s approach will provide an accurate report of impact achieved and provide them with useful information.
  • improve NII’s practice and increase the social impact of NII1.
  • share lessons with the sector on challenges and successes.
  • encourage other impact investors to increase transparency and submit themselves to independent scrutiny.

The impact strategy audit commenced in October 2017 and was completed in January 2018 and was designed as a light-touch rapid process. As far as known to Itad, it is the first learning-focused Impact Strategy Audit in the UK.

You can read the full report here. Alternatively, access the executive summary here.