21 July 2025, LONDON: New research by Pensions for Purpose, commissioned by Impact Frontiers and supported by the Operating Principles for Impact Management, captures views on how impact reporting is used – and what needs to change to support better investment decisions. 

The study, 'Impact integration – advancing reporting & management practices in pension funds', is based on 23 interviews, with 15 pension funds, two asset managers, two investment advisers and one development finance institution. 

While a minority of pension funds surveyed approach impact at the portfolio level without fixed targets, most of them have a specific allocation for impact investments, typically ranging between 5-13% of their overall portfolio. Motivations for these allocations include a blend of place-based outcomes, climate-related goals, long-term financial returns and portfolio diversification benefits.

A major challenge is embedded in the impact literacy which currently exists in UK pension funds, with those surveyed mostly believing that their own impact literacy is ‘average’. Engaging with impact reports proves challenging – only 13% of asset owners reported reading through the entire impact report provided by their fund managers. The majority prefer a high-level overview that distils complex information into metrics or visual formats, with 37% of asset owners reading 25% of impact reports or less. This disconnect between the information available and the ways in which it is being used is startling.

Many asset owners and consultants stressed the importance of not letting perfect be the enemy of progress. In the evolving field of impact reporting, data limitations and methodological inconsistencies are expected. Still, stakeholders broadly agree that it is better to report data that provides a faithful, if imperfect, representation of impact, than to withhold it due to concerns over precision.

Read 'Impact integration – advancing reporting & management practices in pension funds'

Bruna Bauer, Research Manager for Pensions for Purpose said: “Impact reports are too often treated as a box-ticking exercise. The reality is many pension funds aren’t reading the reports they receive and even fewer are challenging what’s in them. That’s a missed opportunity,  for better investments and for protecting against greenwashing."