Date: Wednesday, January 29, 2025
Hello, We are Sandar Duckworth and Liz Smith, Partners at Litmus Consulting in Aotearoa/New Zealand. We are guided by the vision for a stronger and more equitable Aotearoa, and bring together evidence and empathy in our work of evaluation and policy design. In recent years, Impact Investment has come to the forefront, which raised questions about how Impact Investing can consider and address some of the most pressing challenges we face. This year we were delighted to attend Eval24, and present on the evolving landscape of Impact Investing and evaluation in Aotearoa. In the heart of the Pacific, Aotearoa is navigating a transformative journey towards a just, equitable, and sustainable future. The landscape of Impact Investing and evaluation in this region is evolving, driven by a vision to address some of the most pressing social and environmental challenges.
Aotearoa faces many complex issues, from biodiversity loss and water quality concerns to deforestation and climate change. The cost-of-living crisis, homelessness, and inequities for Māori and other communities in health, education, and employment further compound these challenges. Despite these hurdles, momentum is growing towards Impact Investing, albeit slower than in regions like the USA and Europe. Research from 2019 indicated a potential for significant growth in impact investment, possibly reaching $5.9 billion in the medium term.
The focus areas for Impact Investment in Aotearoa are diverse and critical. Specialist Impact Investment funds support social ventures, while advisory services promote the transition to Impact Investing through readiness programmes. The Government also plays a pivotal role, engaging in Impact Investing through managed investment funds.
In Aotearoa, the Government is engaging in impact investment through managed funds. The Government is also using data and analytics to fund early interventions aimed at breaking cycles of dependency and poverty and how best to invest and divest the $70 billion spent yearly on social services.
Māori investment guides, rooted in Tikanga-led or customary systems of values and practices, emphasise sustainable prosperity and intergenerational well-being. Financial returns are crucial to support these aspirations, and Iwi investors are shifting from traditional sectors to new economies like healthcare, technology, and renewables.
Measuring impact in Aotearoa focuses on tangible aspects like financial returns and KPIs while assessing social impacts tends to be more challenging. Māori are developing their approaches for evaluating social impact using kaupapa Māori evaluation based on a Te Ao Māori worldview.
The journey of Impact Investing is not without its tensions. The interchangeable language used to describe it, the balance between short-term financial returns and long-term impacts, and the lack of a system perspective and shared knowledge are some of the key challenges. Solutions often lie within communities, but they do not always have a voice at the table. Achieving meaningful participation requires a commitment to addressing power imbalances, genuine dialogue, and ensuring community needs are central to investment strategies.
As in the US, there is little explicit connection between impact measurement and evaluation. Impact measurement uses the tools of evaluation, but there is limited acknowledgement of this connection. It is two worlds existing side by side with the same goal of a just, equitable and sustainable world.
Evaluation has tools to demonstrate social impact at venture and portfolio levels. Are we missing an opportunity to strengthen the impact of impact investing? Embedding the theories and tools of evaluation (e.g. participatory and development evaluation) would help overcome some of these tensions.
A shared space is needed where both paradigms can collaborate for sustained social and environmental change. This collaborative approach is essential for driving meaningful impact and fostering a more equitable and sustainable future for Aotearoa.
The American Evaluation Association is hosting Social Finance TIG Week with our colleagues in the Social Finance Topical Interest Group. The contributions all this week to AEA365 come from our SF TIG members. Do you have questions, concerns, kudos, or content to extend this AEA365 contribution? Please add them in the comments section for this post on the AEA365 webpage so that we may enrich our community of practice. Would you like to submit an AEA365 Tip? Please send a note of interest to AEA365@eval.org. AEA365 is sponsored by the American Evaluation Association and provides a Tip-a-Day by and for evaluators. The views and opinions expressed on the AEA365 blog are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of the American Evaluation Association, and/or any/all contributors to this site.