Measurement as a mechanism to address informational asymmetry and attractiveness of impact investments in Brazil

Abstract

The purpose of this article is to demonstrate measurement as a form of motivation for investments in projects whose objective is the conception and implementation of socio-environmental solutions. Respecting the necessary methodological framework to understand the subject matter, the hypothetical-deductive method was employed to achieve the specific objective of understanding the importance and effectiveness of establishing metrics in impact investment, as well as its positive consequences in terms of attractiveness. These reasons justify the present study. The approach included distinguishing impact investments from other positive initiatives, as seen in ESG best practices and corporate social responsibility, as well as the main impact metrics, their functioning, and their application by managers and investors. Thus, through the examination of impact measurement, the conclusion of this study is directed towards the hypothesis that each mechanism for establishing guidelines for measuring results has advantages and disadvantages. However, the existence and application of these metrics tend to be more effective in facilitating and securing analysis by investors, in terms of generating results through impact ventures, which enables greater interest in financing effective and, at the same time, profitable socio-environmental initiatives.