We work for children to have a fairer start by age five, to halve obesity in the UK and to drastically reduce home carbon emissions. These missions are ambitious, long-term and potentially transformative - halving obesity for example could lead to an extra 400,000 years of healthy life lived by people across the UK and an estimated £49 billion in societal cost savings. While we believe these ‘moonshot’ missions are, in fact, achievable, we do not expect them to yield easily or quickly - even getting somewhere close to one of them would be a huge accomplishment.

Having launched our missions in 2021, with a target date of 2030, we are midway through the journey. To make headway on a challenge of this scale requires a strong theory of change, built on a deep understanding of the problem and drawing on the best available evidence for potential solutions.

In pursuing impact, we play three roles:

• First, we work as an innovation partner, designing and testing solutions with retailers, energy companies and other organisations on the frontline.
• Second, we act as a venture builder, building and investing in innovative and impactful start-ups.
• Third, we operate as a system shaper, influencing the policies and institutions that shape innovation in order to maximise impact on our missions.

As an innovation partner, we’ve worked with Leeds, York, and Greater Manchester local authorities to trial different approaches to improving early childhood services. Tiny Happy People, developed in partnership with the BBC, has helped expand access to evidence-based parenting resources, while Mini Wonders, our collaboration with museum partners, has demonstrated the potential of cultural spaces as national infrastructure for parenting support.

Our partnership work with Asda helped them develop their health strategy, identify high-potential health interventions, conduct exploratory research to de-risk interventions, design, implement and evaluate live trials, and scale successful interventions across the business. Not only will this work help Asda offer their 18 million weekly customers healthier food choices, but it will also enable us to demonstrate the efficacy of policy interventions to governments, hastening their widespread adoption. One of those most effective routes is our retailer targets proposal which modelling shows would reduce obesity prevalence by 23%, helping 4 million people achieve a healthier weight and saving society £20 billion every year.

Venture builder

As a venture builder, we’ve invested in 16 growing companies in fields connected to our missions since April 2021, building on more than two decades of active investing in early-stage technology companies, and have spun out nine brand new startups through Mission Studio which so far have raised several million pounds and counting in follow-on funding.

We have invested in companies forecast to achieve carbon savings of 3.2 million tonnes (Aira, Mixergy, Naked Energy, Electron), food science innovators who are reducing fat and sugar content in a healthy, natural way (Nandi and AmbrosiaBio), and providers of affordable digital learning content (BibliU). We have also helped drive diversity in the early-stage technology world, with 50% of our mission-aligned investments led by people from minoritised groups.

Our first nine spinouts through Mission Studio are beginning to make real contributions to our missions, and as young tech startups have the potential to scale rapidly in the coming years, driving innovation in key markets.

System shaper

And as a system shaper, we’ve conducted - in pursuit of our mission of halving obesity by 2030 - gold-standard physiology modelling with nationally-representative survey data to show that an 8.5% reduction in kcals, about 216kcal per day for people living with excess weight, would be enough to halve obesity (see video below). Our blueprint for halving obesity, drawing on over 2,000 research papers and an advisory group of 16 academics and experts, gives policymakers the ability, for the first time, to directly compare the impact, strength of evidence and cost of over 30 policies on obesity and clearly see what is likely to work and what isn’t.

Through our work to decarbonise home heating, we’ve launched a plethora of products, services and campaigns: Visit a heat pump, Money Saving Boiler Challenge, Get a Heat Pump to name but a few.

Much of this work has already cut through to direct impact. For example, Nesta’s Money Saving Boiler Challenge led to an estimated 3.1 million households across the UK turning down their boiler flow temperatures, saving households £300 million annually in bills, saving £157 million for HM Treasury and - crucially - reducing CO2 emissions by an estimated 500,000 tonnes.

Our work on these projects enables us to put forward a strong policy case in the UK and devolved nations because each one is grounded in tangible, real-world impact. As such, Delivering clean heat: a policy plan provides all the advice that the Secretary of State for Energy and Climate Change needs to understand the challenge of the heat transition and what they can do to solve it.

We also have a range of entities within our organisation and wider orbit, most notably BIT (acquired by Nesta in 2021), which combines behavioural science expertise with robust evaluation to help clients achieve their goals, and Challenge Works (incubated by Nesta since its inception in 2012) which runs challenge prizes that support innovation in sectors as varied as climate, health, international development and technology. Across the constellation of organisations in the Nesta Group we have a long history of impact across an almost dizzying number of different fields.

Much of the impact of BIT’s work can also be translated into financial terms. For example, the work trialling clearer ‘calls to action’ and harnessing social norms has significantly impacted tax compliance in the UK and across the world. Initial BIT work brought forward an estimated £200 million tax payments in the first two years, and then subsequent work by HMRC and overseas is thought to have brought forward well over £1 billion in tax payments.

In another sphere, BIT’s expertise in intervention design to shape how a Soft Drinks Levy should be implemented in the UK supported the introduction of a levy that reduced average sugar intake by a spoonful a day in Britain. The levy resulted in total sugar in soft drinks decreasing by more than 35% from 2015 to 2019 - the equivalent of removing 47,000 tonnes of sugar from UK shelves each year.

We've distributed over £216 million in funding (with a further £110 million still to be awarded from prizes currently ongoing) and engaged 16,290 innovators across the globe to solve the biggest social challenges of our time. Across this portfolio of prizes, 286 innovator teams have been crowned as prize-winners for their leading solutions.

The ambition behind the £8 million Longitude Prize on Antimicrobial Resistance was to create the urgent ‘pull’ needed to get innovators working on this life-and-death challenge. The winning team, announced in summer 2024, will deliver a novel point-of-care diagnostic test that rapidly and accurately identifies the presence of a bacterial infection and the right antibiotic to prescribe. This is incredible progress that offers the potential to end the ‘just in case’ prescribing that is currently prevalent and which promotes the development of antibiotic resistance, addressing a challenge that is predicted to cause 10 million deaths a year by 2050.

Turning early promise into impact at scale

We’re proud of our impact so far, and at Nesta, as we move into the next phase of our strategy (2025-28), we expect our foundational work to yield even greater impact at scale.

Measuring our impact along the way is crucial because it allows us to gauge progress and make good decisions as we reach for impact at scale - for example, when to go all-in on a particular activity and when to adjust course or walk away. We work in the open and sharing details of our successes and failures is also key, so our hard-learned lessons not only inform our own decision-making but also benefit the next wave of innovators who will come after us.

As a charity, measuring impact is also crucial to our accountability - to our trustees and stakeholders and also to the public at large - for how we've deployed our resources and how effective this has been. Impact measurement helps us to make sure that we are held to account on achieving the most we can with the resources we have.

Impact can be hard to measure

When we measure impact, we are seeking to understand the effect of an intervention on a large number of people. This requires understanding how those people’s lives have or haven’t changed, as well as understanding the extent to which any change can be attributed specifically to our actions. This can get quite complex quite quickly.

For example, if we run a trial with a supermarket on store layout we might be able to trace the change in customers’ shopping baskets with some degree of confidence. However, even in this data-rich environment, it will be very hard to know how that change translates into changes in the healthiness of people’s diets. After all, they may compensate in other ways outside the store and we won’t have visibility of that. Or, when working to improve the quality of interactions between a parent and their young child, we want to trace that through to effects on the child’s overall development, but an enormous number of causal factors are at play over a long period of time. We may be able to measure how that child develops, but getting a grip on the counterfactual - how that child would have developed without the intervention - is challenging.

Challenging doesn’t mean impossible. Randomised control trials (RCTs) are the ‘gold standard’ of efforts to attribute effects to interventions. In a RCT we can create an environment where we can measure what we need to and directly compare to a non-intervention scenario. This can give us confidence that a specific intervention is likely to lead to a specific outcome. We can then, through certain additional assumptions, estimate the likely impact of that intervention in other contexts. Nesta and BIT have significant expertise in the design of RCTs and we use them where we can. They can however be resource-intensive and a lot of our more experimental work is either too small-scale or too early-stage to warrant that investment. Instead, we use a sliding scale of tools, with RCTs at the top, to give us a degree of confidence in cause-and-effect that is proportional to the resources being invested. This helps avoid spending so much time and effort on measurement that it ultimately detracts from our impact.

Some types of impact are harder to measure than others

Impact can also take time to be realised. Krakenflex - now a multi-billion pound asset within Octopus Energy that uses AI to match supply and demand so the electricity grid can deal with the natural volatility of renewable generation - credits much of its successful evolution back to reaching the final stages of Challenge Works’ 2013 Dynamic Demand Challenge, which brought funding, recognition and profile that later proved to be the springboard for future success.

When influencing government policy, it’s also not uncommon for multiple organisations or people to be attempting to move the dial in areas of pressing social concern, making it harder to unpick the impact each had on the outcome. In a context like this, with a huge array of actors, a RCT is not an available option.

Similarly, a venture we build or invest in may ultimately fail but end up being emulated or improved on by a subsequent one, catalysing innovation in a way that is hard to capture. And while challenge prizes are a tried-and-tested method of attracting new innovators to change the status quo, it is hard to be sure that innovators wouldn’t have stepped in to work on a particular problem in the absence of one.

Something similar is true of attempts to shift attitudes at scale. In our work building consumer confidence in heat pumps (see video above), we can observe interactions and gather structured feedback, but to really know whether someone changed their purchasing behaviour as a result would require a detailed understanding of each individual’s decision-making process over a long period of time.

While pinning down causality is complex and can be expensive, there is still a lot we can do to build confidence around the impact we are having. With clear theories of change, we can measure activities and outputs and use clearly-articulated assumptions to quantify what we believe the outcomes and impact ultimately to be. This might not leave us completely sure, but it gets us meaningfully closer. Even in the hardest-to-measure spaces this approach can be instructive.

For example, sometimes a policy idea is so distinctive - like Nesta’s mandatory health targets proposal for retailers, designed to reduce obesity - that one organisation’s input is clearly visible. In cases like this we can use those signals of attribution to estimate the expected impact of our intervention. While any estimate will be imprecise (there will still be many actors contributing to the outcome), we can gain insight that is helpful for decision-making and accountability.

In navigating this complex terrain, there are four principles we follow (and potential perverse incentives we seek to avoid) that help us understand our impact and act on that information.

1) What counts is not just that which can be counted

We don’t choose work on the basis of how perfectly or imperfectly we can measure the impact of that work - to do so would be to fall into a well-known trap generated by an approach that treats measurability as an end in itself. Instead, we start with the work that we expect to be most impactful. Then we select the most appropriate method to assess the impact of the particular strand of work. In some cases - when we run a RCT, or if we run a campaign with a very specific and countable goal - hard numbers are the best way to answer the question of what impact we think we’ve ultimately had. In others, the best available data may be activity or output-based, and what is more meaningful is the overlaid narrative account of what the issue was, what we did and the outcome.

2) Projects must be viewed in the context of programmes and theories of change

We look at how different projects or activities reinforce each other and form part of a coherent programme. This helps us accurately contextualise the value of activities that may not have an immediate large-scale impact but that generate important learning or set the context for another, highly-impactful piece of work. This helps us stay the course on our ambitious goals and realise the long-term benefits of early investments whose value we expect to emerge over time.

This approach is central to Nesta’s mission-driven strategy. We set out a theory of change and spell out how different elements of that theory - whether understanding the problem better or testing a hypothesis directly - need to progress in order to achieve the mission. This approach enables us to target critical uncertainties for further testing and ensure our activities, taken together, are having the impact we want.

3) Pursuing long-term impact at scale means taking risks

We need to set appropriate expectations to avoid dulling our risk appetite. Contrary to popular opinion, most things don’t work, and success isn’t usual or regular. In reality, success is rare and the default is failure or small effect sizes, not transformation. Take the sticky problem of obesity. The UK government has tried 689 policies since 1992, and during that time obesity rates have not gone down - in fact, they have doubled. This is despite obesity being a fundamentally solvable problem - as shown by Nesta’s blueprint for halving obesity toolkit, which evaluates the impact and cost of different policies to reduce obesity.

Investing in innovation for social good is inherently risky and has a high likelihood of failure. Feeling compelled to regularly show progress, because we or others (wrongly) believe that progress is the norm, could incentivise us to move towards the only type of work that is likely to provide this - incrementalist projects that generate smaller but more certain returns. Instead, organisations like Nesta - with the mandate to be bold and pursue impact at real scale - need to embrace the risk of failure, because only then do we have a chance of getting to the scale of impact we seek. The high-risk, high-return profile of an actor like Nesta seeking truly transformational impact is in some ways comparable to that of a venture capital firm, where most things fail and a ‘one in ten’ hit rate is seen as a success - provided the one success is big enough.

4) How information is used is as important as the quality of the information itself

There is a temptation to take comfort in sophisticated dashboards and robust datasets that take a large amount of effort to generate, tidy up, aggregate and synthesise across different levels of the organisation. A particularly common failure mode of impact measurement at foundations and NGOs is to generate this information, at significant cost, and invest much less in ensuring that this information is digested by the right decision-makers and that any such analysis yields action. At its worst, this ‘measurement theatre’ can become an active substitute for meaningful assessment of progress.

Instead, we aim to ensure that we start with the ‘user groups’ of stakeholders that require impact information to make decisions, and then tailor meetings and routines around that, ensuring we have the tailored data and information required to improve the quality of decision-making in that forum. This helps avoid generating a lot of data that is never used, which leads to wasted work, loss of true accountability, and a loss of faith in the process.

Across the Nesta Group, our vision is to improve millions of lives, and become a world leader in innovation for social good. Between now and 2030, we expect more and more examples of early promise to turn into impact at a meaningful scale.

To break the link between family background and life chances, our primary route to impact will be through scaling integrated family support services, such as parenting support, while recognising the need to also address two critical enablers: improving family incomes and enhancing the skills of the early-years workforce.

To halve obesity by 2030, we’ll be focusing on building an undeniable case for action—giving policymakers, industry leaders, and the public the confidence that a healthier food system is not only necessary but achievable. We will scale up our partnerships with retailers, producers, restaurants, and local and devolved governments to trial and test obesity reduction interventions in real-world settings. By piloting these interventions, we want to demonstrate that significant improvements in diet are possible without major downsides for industry or consumers.

And to decarbonise the UK’s homes, we’ll be developing and scaling up initiatives, policies and services that rapidly increase uptake of low-carbon heating. We want to make it more attractive, easier and more affordable for homes to switch to heat pumps and other low-carbon technologies, ensure the policy environment supports and incentivises this shift, and help grow the range of solutions and supply chain to deliver them.

Through all of this, we’ll remain focused on the vision that propels us forward: improving the lives of millions of people by 2030.