Impact Audit of Nesta Impact Investments

2017-2018; Nesta; UK

Nesta Impact Investment Fund (NIIF) is a £17.6m venture capital fund established in 2012 and managed by Nesta Impact Investments (NII) that invests in innovative, high-growth businesses seeking to address major social problems in the UK. NII is backed by Nesta, a global innovation foundation. NIIF has three focus areas: education, health and communities.

Since NIIF’s inception, NII has been committed to a rigorous understanding of the social impact of the Fund’s investments. NII refreshed this effort in 2016/17, developing and publishing a new Impact Strategy with four sections: Our impact principles; Selecting high impact investments; Managing for impact; and Reporting and transparency. Itad completed this audit during October 2017 to January 2018 utilising a lean design. The auditors believe this is the first learning-focused impact audit of its kind in the UK.

The primary objective of the audit is to assess NII’s Impact Strategy in practice, and the secondary objective is to compare NII’s Impact Strategy to good practice from industry Impact Measurement and Management (IMM) frameworks, and to those of other impact funds/fund managers. The Impact Audit is expected to offer additional value to NII, Nesta and the wider investments management ecosystem in terms of improving IMM during NIIF1 and for any future fund and demonstrating the value of an impact audit process.

The impact audit report was well received by the NII team, and Itad is now working towards producing the report alongside NII’s management response for external publication and seeking relevant impact investing industry events to publicise and discuss the value of the report to NII and the sector as a whole.

Image © Teacher in Freetown. Photo Credit: Paul Shaw