How do we align financial incentives with impact outcomes?

As the impact investing industry matures, the conversation is shifting from why to how, and few questions are as important as how to ensure incentives reinforce impact. This groundbreaking report explores Impact-Linked Compensation (ILC), the practice of tying fund manager compensation to social and environmental performance. Drawing on extensive research, including input from over 200 organizations and interviews with 38 GPs, LPs, and intermediaries, this guide provides practical design options, a flexible decision-making framework, and candid insights from practitioners who are pioneering ILC across geographies, sectors, and fund types.