5 Ways Investors Can Benefit from the Integrated Return Model
The model helps investors make smarter, impact-driven decisions that merge financial, social, and environmental returns – designed for a new era of investing.
Impact investors are constantly seeking companies that deliver not just strong financial performance but also create meaningful social and environmental value. In partnership with the Erasmus Platform for Sustainable Value Creation and Erasmus University Rotterdam, we’ve published a report to support investors and companies in making more informed, transparent decisions about what to include in their portfolios.
What Is the Integrated Return Model?
The Integrated Return Model is a decision-making framework that monetises financial, social, and environmental outcomes, calculating the total value a company generates per euro invested in a given year. It aggregates:
- Financial return
- Monetised social impact
- Monetised environmental impact
Expressing all these dimensions in a single currency enables direct comparisons across investments, industries, and impact categories, including biodiversity, climate change, and human rights. This transparency helps investors and companies maximise societal value, not just shareholder returns.
5 Ways Investors Can Leverage the Integrated Return Model
1. Holistic Value Assessment
The model reveals a more complete picture of the value companies create. It distinguishes between financial, social, and environmental returns, offering nuanced insight into each area. This approach not only showcases a company’s strengths but also identifies areas for improvement – fostering accountability and strategic alignment with long-term impact goals.
2. Smarter Portfolio Selection
The model empowers investors to choose companies with a balanced approach to profit and impact. It enables investors to align their portfolios with both profitability and societal impact – ideal for those targeting social enterprises or transitioning businesses.
3. Data-Driven Strategy
Investors often rely on sector-level data, like those from the Global Impact Database (GID), to identify and manage impact risks and opportunities. Company-level data can add more insight in comparing specific investment opportunities but can also be more complex to obtain and apply. Global Impact Database offers insights into both sector- and company level data (for listed companies).
4. Support Outcome-Based Financing
The Integrated Return Model is a strong foundation for outcome-based financial instruments, including sustainability-linked loans and bonds. It enables seamless integration of impact considerations into financial structures, aligning investor returns with real-world outcomes.
5. Align with the CSRD and Emerging Standards
The Corporate Sustainability Reporting Directive (CSRD) marks a turning point in sustainability transparency. It mandates consistent, company-level impact disclosures, requiring data availability and comparability. Methodologies, such as the Integrated Return Model, designed to align with such directives can help investors and companies bridge the gap between compliance and meaningful impact insight.
How We Can Support You
At Impact Institute, our mission is to empower organisations to contribute to a more inclusive, sustainable economy. We do this by offering robust tools, data, and expert advice. IWAF, maintained by the Impact Economy Foundation, provides a harmonised, consistent framework to measure, report, and steer on impact.
- Need help measuring and managing your organisation’s impact in alignment with your strategic goals? We offer data solutions, impact analysis tools, and expert advice.
- Reporting under CSRD or SFDR? We’ve got you covered.
