The Global Impact Investing Network has launched a beta version of its first impact performance benchmark. It will allow investors to assess and compare sector-specific impact performance to peers and to SDGs, and to make investment choices to maximise impact
In brief
- The new IRIS+ impact performance benchmark on financial inclusion assesses investors’ data across key KPIs, comparing it to relevant social performance thresholds
- It allows investors to compare their impact performance against that of their peers, enabling them to optimise their impact strategies
- The benchmark has been designed in collaboration with asset managers active in the financial inclusion space
- It will be rolled out to cover other sectors, with agriculture and energy next in line
The new IRIS+ impact performance benchmark has been designed to allow investors to analyse and compare the impact performance of their investment in specific sectors against that of their peers, relative to specific goals, such as the Sustainable Development Goals (SDGs).
The benchmark will be rolled out to cover other sectors beyond financial inclusion, with agriculture and energy next in line.
According to GIIN’s CEO Amit Bouri, the launch marks a big milestone not just for the organisation but “for the entire impact investment market and the financial market more broadly”. He added: “Our goal is for impact performance benchmarks to play the same role that financial benchmarks play in investing, which is to create a mechanism by which investors can push themselves to achieve superior performance.”
The benchmark has been built on the GIIN’s methodology for comparing and assessing impact, introduced a year ago. It assesses investors’ data across key performance indicators, comparing it to relevant social performance thresholds.
This allows investors to see how they are doing in terms of the global challenges they seek to address, and the gaps that need to be filled.
“As an investor you want to know that you are contributing towards filling the gaps. Are you doing it at the pace that is required? And, if you are below, maybe you should be asking yourself some questions about what you are going to do about that,” says Dean Hand, the GIIN’s chief research officer. “[The benchmark] allows you, as an investor, to make more affirming choices towards the goals that you are trying to achieve.”
Design team
Hand stresses that the benchmark is the result of years of work dedicated to understanding and comparing impact performance across different themes, and of close collaboration across the sector.
A total of 13 asset managers active in the financial inclusion sector were part of the benchmark’s design team, including BlueOrchad Finance, LeapFrog Investments, Triodos Investment Management and Triple Jump, to name a few.
“We have built the benchmark very much in conjunction with investors. We asked them what they wanted to see in the benchmark, and what would help them to make investment decisions,” Hand says.
Christophe Bochatay, manager of ESG and impact at Triple Jump, was part of the design team. He says: “By trying to combine a large amount of impact data from different financial inclusion investors into one single database, this effort is attempting to bring impact reporting and management to the next level.”
“Being able to compare one’s impact performance with peers, and slice and dice the results by different segments, will allow investors to better differentiate between products and optimise their impact strategies,” Bochatay notes, adding that the release of the benchmark’s beta version is “the beginning of a long journey towards transparent, comparable and insightful impact data”.
Next steps
Hands explains that the benchmark’s main aim is to provide investors with the data they need to make investment decisions that result in greater, more effective impact.
“Ultimately, it builds trust and confidence in what we are doing. The world is not a great place at the moment, and we need to be able to work effectively with the impact dollars that we have, to be able to drive the impact performance that is required,” she says.
The beta version is currently available to a select group of asset owners and managers who are users of IRIS+, the GIIN’s impact measurement and management system, but a static version of the financial inclusion benchmark is available for all investors to view.
The GIIN hopes to open the final version of the benchmark to the general public in the summer, once it has received feedback and further input from beta users.
