Charlotte O'Leary, CEO, Pensions for Purpose; Matt Ripley, Director of Impact Frontiers; and Joohee Rand, Head of Secretariat for the Operating Principles for Impact Management (OPIM), explored how pension funds are allocating capital, assessing outcomes and reporting on impact, while also considering what is required to further embed impact integration across the industry.

Session 1: the status of impact integration

The meeting opened with a review of Impact Integration – Advancing Reporting & Management Practices in Pension Funds, research commissioned by Impact Frontiers, supported by OPIM and undertaken by Pensions for Purpose. 

Current approaches to impact investment allocation

• Growing allocations: most asset owners who were interviewed are now making specific allocations to impact investments, typically ranging from 5-13% of total portfolios. This is a notable increase, given the historically small proportion dedicated to impact strategies.
• Divergent approaches: asset owners adopting dedicated allocations are frequently motivated by climate goals and net-zero commitments. Others prefer a more holistic approach, embedding impact considerations across portfolios without creating discrete buckets. This divergence reflects an industry split between intentional, impact-led strategies and those where impact is treated as a secondary factor.

Challenges and practices in impact performance reporting

• Fragmented practices: a central theme was the lack of standardisation in impact performance reporting. Asset owners struggle with diverse methodologies and metrics, limiting comparability.
• Reliance on intermediaries: many investors depend heavily on manager reports, supplemented by qualitative assessments and consultant input.
• Decision-usefulness: while impact reports are valued for tracking progress and guiding engagement, they are less influential in shaping allocation decisions. The absence of harmonised frameworks remains a barrier to meaningful benchmarking.

Importance of qualitative information and storytelling

• Engaging stakeholders: participants emphasised that qualitative narratives and storytelling in impact reports play an important role in making impact tangible for trustees, members and investment teams. Real-world examples foster emotional connection and support member engagement.
• Balancing rigour and resonance: while compelling stories enhance accessibility, striking the right balance with robust quantitative data remains challenging. Further innovation is needed to ensure reports are both credible and engaging.

Priority areas for improving impact reporting and integration

The research highlighted three main areas of focus for strengthening reporting practices:

1. Standardisation and consistency: reducing fragmentation across metrics and methodologies.
2. Transparency: openly acknowledging trade-offs and negative externalities, not just positive outcomes.
3. Decision-usefulness: ensuring reports are practical tools for guiding asset allocation and engagement.

• What research finding was the most surprising for you and why?
• Where are you on your impact journey, and where would you like to be?

Reflections

Discussions noted current approaches often rely on arbitrary standards that fail to capture the complexities of natural capital or people, and highlighted the need for greater standardisation and consistency across climate data, natural capital, biodiversity and social factors.

With relatively high allocations to impact, it is important to define and differentiate what truly constitutes impact. Storytelling was seen as a vital tool to persuade and communicate effectively with pension fund members, trustees and investment teams. A clearer definition of impact for the field is needed, alongside reflection on whether additionality should be considered a core characteristic of impact investing, given that in the climate space it can be difficult to demonstrate additionality at market rates. Concerns were also raised about how few people are reading impact reports, with possible reasons including lack of time, limited resource or reliance on consultants to aggregate data, which raises the question of what good reporting should look like.

Session 2: ways to strengthen impact integration

Matt Ripley of Impact Frontiers introduced the five ways forward identified in the Impact Lens research, noting that these interconnected priority areas have been grouped around key themes that emerged from the work. While some represent significant, multi-year challenges, the emphasis was on how to take the first steps and ensure progress is made in the right direction.

1. Educate the industry: addressing misconceptions and building fluency around fiduciary duty, responsible investment, and the relationship between impact and financial performance.
2. Improve data quality: enhancing the reliability, transparency and comparability of impact data.
3. Align on impact reporting and management practices: creating greater convergence around widely recognised standards, including OPIM, the Impact Performance Norms and the Impact Investing Principles for Pensions.
4. Build collaboration and dialogue: fostering constructive exchange across stakeholders, with examples from local government pension scheme (LGPS) pooling and cross-fund initiatives cited as positive models.
5. Reframe investment: embedding impact as a core investment consideration alongside risk and return, supported by compelling communication of outcomes for beneficiaries.

Breakout groups then addressed the following questions:

• What type of training and education would be most important to you?
• What would help you adopt impact reporting and practice standards?
• What opportunities do you see for collaboration and dialogue?
• How can we improve both the quality and usability of impact data, so that it supports confident decision-making across the investment chain?

Training and education are essential to address misconceptions around fiduciary duty; to clarify the link between impact and returns; and to build capacity across trustees, committees and investment teams, including complex topics such as natural capital and blended finance.

Adopting impact reporting and practice standards requires clear internal mandates, practical ways to communicate complex outcomes, and collective adherence to norms and standards, with safe spaces for learning and sharing enabling more effective deployment of capital.

Collaboration and dialogue among development finance institutions, multilateral development banks and pension funds is seen as important to standardise approaches, bring sectors together and enhance impact, particularly in emerging markets.

Finally, data quality and usability should focus on collecting the right, decision-useful information aligned with investment objectives and theories of change, combining quantitative and qualitative insights to support consistent and actionable reporting.

Closing remarks

Charlotte O’Leary reiterated the importance of ongoing engagement and encouraged participants to provide feedback, engage with the Impact Lens Research report and share insights within their organisations. Charlotte emphasised the role of forums such as the CIG in fostering safe, constructive dialogue and advancing collective progress.

The meeting reaffirmed that impact integration is a maturing but uneven practice within pension investment. While clear progress is evident, continued focus on data quality, education, standardisation and collaboration will be essential to ensure impact is consistently embedded within strategic decision-making and contributes to improved outcomes for beneficiaries.