“I want to measure impact, but I don’t know where to start”
This is the first wall most organizations pursuing impact management hit. For environmental indicators there’s CO2 emissions—but what should you measure for social indicators? Is there an industry standard? How do you make it externally verifiable?
This article explains, step by step, a practical procedure for designing KPIs using IRIS+ (the impact reporting and investment standard) provided by the GIIN (Global Impact Investing Network).
What is IRIS+?
IRIS+ traces back to "IRIS," created in 2008 by the Rockefeller Foundation and others; the GIIN took over its development in 2009 and has continued building it since. More than 780 metrics are now organized (as of the 2026 IRIS 5.3c release), along with "Core Metrics Sets" covering major impact themes such as agriculture, education, financial services, healthcare, energy, water & sanitation, and housing. GIIN provides IRIS+ as a free public good once you register.
IRIS+ has three benefits: (1) it functions as a common language aligned with the SDGs and the expectations of impact investors; (2) because metric definitions and calculation methods are standardized, external comparison becomes possible; and (3) it links to the Operating Principles for Impact Management (which GIIN also administers) and the five-dimension impact framework that grew out of the Impact Management Project and is now stewarded by Impact Frontiers.
Step 1: Identify your impact theme
The starting point for KPI design is identifying “the social or environmental issue your company addresses.” The outcomes and impact defined in your Theory of Change are the origin.
Companies with multiple impact themes (e.g., agriculture × gender equality) are advised to pick the single most core theme, or narrow to two key ones. Spreading too wide causes measurement costs to explode.
Example: a food-loss-reduction platform
Core theme: “Sustainable Food & Agriculture”
Related SDGs: 12 (responsible consumption and production), 13 (climate action)
Step 2: Select metrics from the IRIS+ thematic set
Log in to the IRIS+ website (iris.thegiin.org) and open the “Thematic Indicator Set” for the theme identified in Step 1. Each theme lists “Core Metrics” (essential core indicators) and “Additional Metrics” (supplementary indicators).
Consider the Core Metrics first. For example, the Core Metrics Set for the “Food & Agriculture” theme includes indicators related to waste reduction (e.g., Waste Reduced) and to changes in client/beneficiary income (e.g., Client Income). Because metric codes change between releases, this article intentionally omits specific codes — always confirm the current Core Metrics Set on the official IRIS+ site (iris.thegiin.org) when finalizing your design.
In the early stage, narrow to 3–5 metrics. Too many KPIs make measurement a hollow exercise.
Step 3: Check the definition and calculation, and translate it into your own version
Each IRIS+ metric comes with a “definition,” “calculation method,” and “data-collection notes.” Apply these to your business model and document “how we calculate this.”
Key task: make the measurement assumptions explicit
Creating this “Measurement Methodology” is the single most important task determining the credibility of impact reporting.
Step 4: Set a baseline
A KPI’s meaning comes from comparison with a baseline (the state before the intervention). If possible, capture baseline data before starting the business. If the business is already running, set an “estimated pre-intervention value” and make its basis explicit.
A baseline caution: also consider estimating “what would have happened without you” (deadweight). For example, if a food-loss-reduction platform reports “10 tons reduced” but 5 of those tons would have been reduced even without it, the net contribution is 5 tons.
Step 5: Embed the measurement and reporting cycle in the organization
A KPI does not work just by being designed. Embed the following cycle into organizational processes:
Organizations that turn impact measurement into a “tool for decision-making” rather than “work for reporting” earn high marks on Impact Management Review’s Power (application) score.
Common pitfalls for Japanese companies
Pitfall 1: Confusing outputs with outcomes
“We trained 10,000 people” is an output. “Trainees’ income rose 20%” is an outcome. Be conscious of raising KPIs to the outcome level.
Pitfall 2: Choosing only metrics you can measure
Concentrating on CO2 emissions (easy to measure) and omitting social effects on beneficiaries (hard to measure). Check during design that you are not leaving important outcomes out of measurement.
Pitfall 3: Never changing the KPIs you set
KPIs need to be updated as the business evolves. If you avoid change out of concern that “we won’t be able to compare with previous KPIs,” you’ll keep measuring metrics that have drifted from reality.
