Scaling up (or Scaling) refers to the process of growth and expansion through which a successful initiative, programme or model increases its social and environmental impact by extending its reach, capacity or geographic coverage.

Monitoring is the ongoing, systematic process of tracking performance against predefined indicators, collecting data and assessing progress over time. In impact investing, monitoring includes tracking not only activities but also outputs, outcomes and impact pathways.

Broad category that includes use-of-proceeds, SDG-linked (i.e. performance-based) and general purpose bonds either issued by companies, governments and municipalities, or for activities and projects (e.g. issued through a special purpose entity).

UNDP initiative to create a suite of complementary resources to facilitate increased private sector investment towards advancing the SDGs. The SDG Impact products include the SDG Investor maps, and the SDG Impact Standards, assurance framework and online IMM training developed through the Case Centre at Duke University.

232 indicators used to measure the 169 targets related to the 17 SDGs.

Bonds whose performance is linked to achieving (or contributing to) certain SDG related outcomes or targets, such that failing to meet those outcomes or targets results in a pre-specified cause of action (e.g. a step-up/step-down in the margin required to be paid on the bond if impact performance is lower/higher than a pre-specified target).

169 targets that have been set in relation to the 17 SDGs.

SDGD (Sustainable Development Goals Disclosure) Recommendations are a set of reporting recommendations designed to enable organizations to identify material risks and opportunities related to the Sustainable Development Goals (SDGs); align their strategies, business models and operations to contribute to the SDGs; and transparently disclose their impacts on the SDGs. These disclosure recommendations are grounded in long-term value creation, materiality, stakeholder orientation and the sustainable development context.

A Second Party Opinion (SPO) is an independent assessment provided by a qualified external organisation that evaluates the alignment of a bond, financial instrument or financing framework (e.g. green, social, sustainability or impact bonds) with relevant principles, standards or taxonomies. SPOs assess the credibility of the issuer’s framework, intended impact objectives, governance structures and use-of-proceeds. They are distinct from impact assurance, as SPOs typically focus on ex-ante alignment rather than ex-post verification of results.

Securitisation is the process of pooling financial assets such as loans or receivables and converting them into tradable securities, improving liquidity and distributing risk. It is increasingly used to finance social and environmental impact initiatives.

Seed Funding (or Seed Capital) is the initial capital provided at the earliest stage of a venture to develop its business model, validate its product or solution and prepare for further growth.

The process of identifying a range of plausible scenarios based on different assumptions (e.g. an expected case, a worst case, and a best case scenario), and assessing the variability of outcomes based on changes in the scenario. This is especially important in uncertainty, i.e. when the variables are not completely within, or are outside, the entity’s control (e.g. climate change).

Part of the European Commission’s package of reforms to implement its sustainable finance strategy. Requires all EU-based financial market participants to disclose ESG risks, with additional requirements for investments or products that make specific ESG or sustainable investment claims.

Short-Term Investment refers to investment instruments with a return period that is generally one year or less, characterized by high liquidity and the ability to be quickly converted into cash. They are typically preferred for short-term financial returns, cash management, or risk hedging purposes. In the context of impact investing, short-term investments are often strategically balanced with structures that support the creation of long-term impact.

Social and relationship capital refers to the institutions, relationships, shared norms, and networks within and between communities, stakeholder groups, and other networks that enable the sharing of information and contribute to individual and collective wellbeing. It includes shared values, norms, and behaviours; relationships with key stakeholders and the mutual trust and willingness to engage that an organization builds and maintains with its external stakeholders; intangible assets such as brand and reputation; and an organization’s social licence to operate.

The Social Bond Principles (SBP) are voluntary guidelines designed to support the issuance of bonds that finance projects delivering positive social outcomes, particularly for defined target populations.

A Social Business refers to an enterprise established with the primary objective of addressing a specific social problem, operating on a non-loss and non-dividend basis and designed to be financially self-sustaining. In this model, all profits are reinvested in the business itself or in other social businesses, rather than being distributed as dividends to investors, with the aim of expanding and deepening social impact.

The Social Economy refers to an economic system where social benefit, solidarity and inclusive development take precedence over profit maximization, encompassing organizations such as cooperatives, foundations, associations, social enterprises and impact-driven businesses.

A Social Enterprise is an enterprise whose primary objective is to address a social and/or environmental challenge, and which achieves this objective through a market-based business model, generating a significant share of its income from commercial activities. Social enterprises place impact at the core of their operations and view profit not as an end in itself, but as a means to sustain and scale their mission

A social entrepreneur is a change agent who identifies social or environmental problems and develops innovative, sustainable and scalable solutions, typically through creating and leading an enterprise whose primary goal is to produce social benefit.

Social Impact refers to the positive or negative changes in the living conditions, well-being, behaviours, or access to opportunities of individuals, communities, or society as a result of an activity, project, programme, or investment. Social impact may be direct or indirect and can occur in the short or long term. Social impact goes beyond outputs and encompasses the real changes in people’s lives that result from those outputs.

Social Impact Assessment refers to the systematic process of identifying, analysing, monitoring and managing the actual or potential social impacts of a project, policy, investment or intervention on individuals, groups and communities. Social Impact Assessment considers both positive and negative social effects, is commonly used as a preventive and corrective tool, and does not require the production of causal evidence. Stakeholder engagement and qualitative analysis play a central role in this approach. Rather than proving causality, Social Impact Assessment focuses on understanding the scope, nature and distribution of social impacts.

A Social Impact Bond (SIB) is a results-based financing and contracting model through which private investors provide upfront capital to fund the delivery of a social programme or public service aimed at achieving predefined social outcomes. In this model, the target outcomes are specified ex ante by a public authority or outcome payer and are independently verified at the end of the intervention. Investors are repaid only if the agreed outcomes are achieved; if outcomes are partially achieved or not achieved, repayments are reduced or may not occur at all. Social Impact Bonds shift performance risk away from the public sector and onto investors, promoting more efficient use of public resources and encouraging innovation in service delivery. Despite the term “bond,” Social Impact Bonds are not bonds in the conventional financial sense: they do not offer fixed returns, and payments are entirely contingent on outcome achievement. They should therefore be understood as an innovative public service financing and contracting mechanism rather than as financial securities.

Social Impact Funds refer to investment funds that allocate capital with the explicit intention of generating measurable social impact while also targeting financial returns. These funds invest in organisations and projects that aim to address social challenges, demonstrate a clear social impact intent, and commit to measuring and reporting the impact they generate. Depending on their investment strategies, social impact funds may target below-market, market-rate or above-market returns and can operate across a range of asset classes, including private equity, debt and hybrid financial instruments.

Social innovation is an activity that is social in both its ends and its means, involving the development and implementation of new ideas—products, services, practices or models—that better address social needs while creating new social relationships or collaborations and enhancing society’s capacity to act.

Social Investment refers to investments made with the intention of generating measurable social impact while also targeting a financial return. This approach aims to channel capital toward enterprises, projects and programmes that create long-term social value alongside financial sustainability.

Social Return on Investment (SROI); is an analytical method that monetizes the social, environmental and economic value created by an investment and compares it to the cost of the investment, answering the question: “How much social value is created per unit of investment?”.

The Social Return Ratio expresses the magnitude of social value generated relative to the investment made, helping quantify and compare social outcomes in economic terms.

Social risk can be understood as the potential adverse social impacts of an organization’s or investment’s activities on people and communities—such as human rights issues, labour conditions, community conflict or social exclusion—and is closely linked to the “S” in ESG, often assessed through environmental and social risk management systems.

The Social Sector refers to the field comprising organizations and institutions that work primarily for public and social benefit, including government social services, civil society organizations, social enterprises and community-based institutions.

Social Value refers to the positive social outcomes and improvements in well-being generated by a programme, organisation or investment, extending beyond purely economic outputs to include benefits experienced by individuals, communities and society as a whole.

Soft Loans, also referred to as Concessional Loans, are loans provided on terms more favorable than market conditions, such as below-market interest rates, extended maturities, grace periods, flexible repayment structures and, in some cases, a grant element. They are typically offered by governments, development banks, development finance institutions or international organizations to support projects that generate social, developmental or environmental benefits.

A Sovereign Wealth Fund is a state-owned investment fund that manages national financial assets such as budget surpluses, foreign reserves or natural resource revenues to generate long-term value and support strategic investments.

Spectrum of capital refers to the continuum of capital ranging from philanthropic and grant-based funding to fully commercial market capital, including catalytic capital, blended finance and market-rate investments.

A Stakeholder is any individual, group or organization that affects or is affected by the actions, decisions or outcomes of a program, organization or investment.

Involving Stakeholders in ongoing planning and decision-making that is two way, conducted in good faith, responsive and results in Stakeholders having meaningful agency in decisions that impact them (i.e. there is evidence that Stakeholder needs and preferences influence and change decisions and outcomes). The degree of potential social, economic and/or environmental impact on Stakeholders, the level of risk of and Stakeholders’ tolerance for, unexpected outcomes, and how disadvantaged Stakeholders are will determine the appropriate level and form of Stakeholder involvement.

Application of judgement based on an individual perspective when objective data is not available.

Subordinated Capital (or Residual Capital) is capital with lower repayment priority compared to senior investors, typically absorbing higher risk and thereby protecting other capital layers. In impact investing, it often acts as catalytic capital to crowd in additional investors.

Subordinated (Junior) Loans are loans that rank below senior debt in repayment priority, carrying higher risk and often supporting risk-sharing structures in investment models. They help enable capital stacking and attract private investors.

Sustainability refers to meeting the needs of the present without compromising the ability of future generations to meet their own needs, balancing economic, social and environmental dimensions.

The Sustainability Bond Guidelines (SBG) provide guidance for bonds that finance a combination of green and social projects, integrating the core components of both the Green Bond Principles and the Social Bond Principles.

Sustainability Indicators are quantitative and qualitative metrics used to measure, monitor and evaluate the environmental, social and governance performance of an organization, project or policy.

A Sustainability Report is a document in which an organization discloses its environmental, social and governance performance, impacts, goals and commitments to stakeholders, often aligned with international reporting standards.

Sustainable Development refers to development that meets the needs of the present without compromising the ability of future generations to meet their own needs, balancing economic growth, social well-being and environmental protection.

Sustainable Investment refers to investments that pursue long-term financial returns while supporting environmental and social sustainability, through effective management of ESG risks and opportunities.

An international membership network focused on adopting decision-making, ways of working and resource allocations that embed principles for social value measurement and analysis. The aim is to promote equality and wellbeing and reduce environmental degradation.

The SDG Impact Standards are aligned with SVI’s seven principles of social value. SVI has developed a number of Standards to provide further guidance on implementation of their seven principles of social value including: Involve stakeholders, understand what changes, value the things that matter, only include what is material.

System Change refers to the transformation of the structural conditions that sustain a problem in its current state. These conditions consist of interrelated elements such as policies, practices, flows of resources, relationships and connections, power dynamics, and mental models.

A way of thinking that supports better decision-making by considering the connections and interdependencies between parts of a system, helping reduce unintended consequences and improve overall system performance.