A recent BlueMark study revealed significant challenges in funds’ impact reporting to investors, highlighting gaps in the completeness of disclosures, the quality of data and the fact that 97% of funds do not regularly quality check their impact data. BlueMark is a leading provider of impact verification and intelligence.
The report draws on findings from BlueMark’s pilot programme for its Fund Impact Diagnostic (“Fund ID”), which evaluated 37 impact funds managing $326 billion in combined assets. Fund ID was developed through five years of research, drawing on learnings from BlueMark’s verification work and industry standards. Including those managers who were on the pilot, over 60 funds have been through the assessment.
The study found that whilst there is generally good practice across the areas assessed, reporting practices achieved an average score of just 54%, the lowest among the four pillars, which were governance, management, strategy and reporting. These four pillars represent key dimensions of impact accountability. This highlights gaps in the completeness of disclosures, the quality of data and lack of verification, highlighting significant transparency and accountability gaps that threaten investor confidence and could raise concerns about “impact washing.”
Key Findings
· Overall Strength in Impact Practices, but Gaps Remain: Pilot funds averaged a 61% Gold rating, reflecting strong adoption of impact management best practices. However, scores varied widely from 19% to 86%, with fewer than 25% achieving the highest Platinum rating.
· Governance and Management Lead Performance: Governance scored 63%, showing strong integration of impact in decision-making, though only 33% had dedicated impact representation on investment committees. Management led with 67%, with most funds excelling in due diligence.
· Stakeholder Engagement Gaps: Only 31% of funds actively incorporate stakeholder perspectives into their monitoring processes.
· Disparities in Performance by Fund Size: Large and small funds tend to outperform mid-market asset managers in impact governance and reporting. Larger funds, in particular, benefit from dedicated resources, advanced tools, and external expertise to strengthen their reporting practices.
· Limited Use of Impact Targets: Just 19% of funds set measurable portfolio-level impact targets—such as emissions reductions or beneficiary reach—limiting the ability to assess societal and environmental outcomes effectively.
Paige Nicol, Senior Director, BlueMark said: “Our findings highlight the progress made by leading and specialised funds but also reveal broader transparency gaps that impact the industry as a whole. As demand for transparency grows, standardisation and accountability are needed to ensure impact investing delivers on its promises. With credible reporting, the industry can keep high levels of trust investors placed in it, that is critical to scaling impact investing.”
The study also revealed other disparities in performance by fund size. Both large and small funds outperform mid-market asset managers in impact governance and reporting, while the industry as a whole struggles with underdeveloped reporting practices and meaningful stakeholder engagement. Meanwhile, large funds on average outperformed both small and mid-market funds across all four pillars, being able to leverage their scale and resources, including advanced tools, dedicated teams and external consultants.
Jack Isaacs, Senior Associate, BlueMark said: “Fund ID helps level the playing field by giving smaller and mid-market funds a standardised, comparable framework to confidently communicate their impact strategy and results. At the same time, it allows investors to assess a fund’s impact strategy, execution and results – ensuring informed decision making.”
As asset owners and allocators increasingly demand independent verification of impact claims, especially amid growing scrutiny on sustainable finance, BlueMark’s Fund ID provides a vital tool for assessing and improving the credibility of impact funds. By driving transparency and accountability, Fund ID enhances investor confidence and helps the industry meet its commitments to delivering real, measurable impact.
