Assessing absolute sustainability: An analysis of impact assessment tools

Impact investors require information on whether a company's impacts are consistent with global environmental and social limits, yet the impact assessment tools (IATs) available for this purpose remain methodologically heterogeneous and rarely reflect absolute sustainability. In this paper, we address this gap in two steps. First, we conduct a systematic literature review on absolute sustainability to derive criteria for how absolute sustainability should be reflected in IATs conceptually for investment decision-making. Second, we translate these criteria into an analytical framework comprising a descriptive and an evaluative layer, with the latter specifying 12 criteria across 5 dimensions with a four-level scale. We apply this framework to 15 IATs. We find that IATs differ substantially in methodological rigor and rarely integrate a full life cycle perspective, absolute global thresholds and their allocation, as well as temporal dynamics or evidence of causal contribution. We further identify interdependencies between IATs, indicating that they are complementary rather than substitutable. Because IATs pursue different objectives, the descriptive layer represents this variation, implying that the results should be interpreted as alignment with the concept of absolute sustainability rather than as a universal quality ranking. We conclude that IATs are not yet adequately equipped to support capital allocation aligned with absolute sustainability, and that closing this gap requires operationalizing thresholds, allocation, and causal attribution at the company level.