The advent of the SDGs, growing dissatisfaction with current economic models, the explosion of impact investing, impact measurement and other innovative finance models coupled with the potential that the fourth industrial revolution presents and the growing ubiquity of digital technology has created the context in which an overhaul of current monitoring and evaluation practices is required.

Robert Picciotto says in his book, The 5^th wave: Social impact evaluation: “The evaluation discipline has yet to adapt its methods and processes to the dynamic pace of decision-making favoured by new actors, technologies and ecosystems.”

But things are starting to change. The OECD has acknowledged that the current approach to monitoring and evaluation is failing as evidenced by their decision to review their evaluation standards and draft new criteria for evaluation. This process kicked off with extensive stakeholder engagement that showed that the current approach is ineffective and increasingly irrelevant within the current context.

New approaches to evaluation such as participatory evaluation, democratic evaluation, empowerment evaluation, horizontal evaluation, realist evaluation, utilisation focused evaluation, culturally responsive evaluation seem to be created monthly by leading experts which also suggest that existing approaches may not serve different contexts.

In addition, a number of impact forecasting and modelling approaches are also being developed.  For instance, the International Finance Corporation are in the process of piloting a new rating system designed to assist with better allocation of finances and support its existing Development Outcomes Tracking System. The Anticipated Impact Measurement and Monitoring (AIMM) system offers an “end-to-end” framework to help the IFC decide with projects to support based on a range of quantitative and qualitative information, indicators and estimates about the project’s likely impacts on poverty alleviation and market creation.

These moves by influential players in the sector point to the growing need for a global ‘gold standard’ for monitoring and evaluation that takes into account the shifting context and accommodates the needs of both the traditional development sector as well as the growing impact investment sector.

Despite the differences in language and in approach both sectors are facing similar challenges in responding to the shifting context. Below we are outlining some key trends affecting both sectors.

1. The SDGs requires M&E and impact measurement practice that speaks to the 17 goals and the 230 sub-indicators, at a country level, a regional level as well as a specific theme.
2. Demand for indicators that measure both financial and social/environmental impact that also aligns with or considers new and emerging innovative/blended financial models are gaining ground in the sector. 
3. The need for standardised, appropriate and effective methodologies and toolkits that respond to the performance management and measurement requirements of a range of new actors operating in the development sector (i.e. venture philanthropists, ESG investors, impact investors, social investors, grantmakers/donors and philanthropists, etc.) is driving the large range of new and customised measurement methodologies and approaches currently being explored.
4. Until now traditional M&E practice focused on developmental outcomes, now there is a much greater focus on and need for financial indicators to evaluate the financial value and impact of social and impact investments.   
5. There is now a need for new methodologies that look for the contribution effect (that tracks collective, attribution, contribution and leverage of multiple contributors and funders) rather than the attribution of a single funder.
6. Nuanced data is now required that speaks to the entire investment cycle, not just the programme cycle.  In this regard – performance data that will inform due diligence decisions, impact management as well as impact measurement data, is critical.  Traditionally the focus has only been on baseline and end line evaluation data.
7. New data collection approaches that use the strengths of digital technologies to capture data has become a necessity to collect more data, more cost effectively and efficiently.
8. Ethics and principles that guide behaviour, is an especially important topic in evaluation practice.  Principled action and the protection of human rights, data privacy and security have become serious considerations for all stakeholders in the value chain.  From the commissioners of research and evaluation, to practitioners and professionals in the sector, evaluation outcomes rather than being prescribed or predetermined by funders and investors.

Roberto Picciotto also distils how these trends translate into key policy directions for the sector: