GIIN Perspectives on Impact Measurement SPTF MEETING FEBRUARY 27, 2013

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1 GIIN Perspectives on Impact Measurement SPTF MEETING FEBRUARY 27,

2 Overview of the presentation What is Impact Investing? Definition Who invests in it? Mapping the players Themes and asset classes? Global overview Measuring: heart of the matter Measurement IRIS Taxonomy 2

3 What are Impact Investments? Impact investments are made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. They can be made in both emerging and developed markets, and target a range of returns from below market to market rate. Global Impact Investing Global Impact Network, Investing 2013 Network

4 Social Return Who invests in it? Philanthropic investors Impact Investing Space Institutional investors Financial Return 4

5 Themes & Asset Classes Themes Agriculture Microfinance Renewable Energy SMEs Education Community Development Health care Green Real Estate Asset Classes Private Equity Venture Capital Private Debt Social Bond Fund Direct Loans Real Estate Real Assets 5

6 Impact Investing: Global Examples Economic Re-development Econ Bridges Ventures Hoxton Hotel in deprived neighborhood of London Microfinance Pro Mujer Bolivia, Nicaragua, Peru Agriculture in Africa Futuregrowth African Agri Fund Sub-Saharan Africa 6

7 Impact Measurement Prevalence A 2012 report by J.P. Morgan and the GIIN surveyed 99 impact investors 96% of respondents measure their social and/or environmental impact 52% of respondents are aligned with IRIS 98% of respondents believe that standardized impact metrics are at least somewhat important for industry development Figure 21: Importance of standardized impact metrics to industry development Number of respondents = 98; Respondents chose one answer Very important Important Somewhat important Not important at all 28% 2% 33% 37% 7

8 What is IRIS? IRIS is a catalog of generally accepted performance metrics that leading impact investors use to measure social, environmental and financial success. The development of IRIS is overseen by an Advisory Body and is managed in accordance with best practices for designing credible social and environmental metrics systems. 8

9 IRIS How was a IRIS Meta-Standard developed? Example Metrics Client Protection Policy Operational Impact Greenhouse Gas Emissions Full-time Employees Community Service Green Building Practices Product Impact Low Income Clients Energy Produced Housing Units Financed Producer Price Premium School Meals Financial Performance Earned Revenue Cost of Goods Sold Net Income 9

10 Measuring Impact: heart of the matter Start with the right question Evaluation planning should always begin with the questions to be explored. But that is not yet the norm. In part, this is because people assume that the question of interest is Did it work? Well, that could be the most useful question to explore, but it also could be How did it work? or How will it work? or Does it work every time? or Why did it work? Jackie Williams Kaye, The Atlantic Philanthropies 10 Global Impact Investing Global Impact Network, Investing 2013 Network 2013

11 Different approaches to measurement Impact Investing requires info on inputs, outputs, outcomes and, ultimately, impact of an investment. Not an easy task, however. 1) Formative evaluations - The goal of social impact assessment is to drive improvements that increase the value of programs to the people they serve (McKinsey). 2) Summative evaluations - The aim is to determine the relevance and fulfilment of objectives, developmental efficiency, effectiveness, impact and sustainability (Dutch Government IOB). 11 Global Impact Investing Global Impact Network, Investing 2013 Network, 2013

Essential Practice for Impact Investing Track social and environmental performance data using standardized measures where appropriate and: Communicate with external stakeholders Evaluate (potential)

12 Essential Practice for Impact Investing Track social and environmental performance data using standardized measures where appropriate and: Communicate with external stakeholders Evaluate (potential) impact of investments Set performance targets with investees And more If we are going to call ourselves impact investors, than we simply need to adopt a standardized metric system that will give us third party credibility. - Impact First Direct Investor 12

13 Methods & Tools Management Assessment Certification Cradle to Cradle C2C Actionable Measurement Gates GRI Framework GRI IRIS Framework GIIN Monitoring & Evaluation Civicus PULSE Acumen Getting to outcomes RAND SROI Noaber Cradle to Cradle C2C Actionable Measurement LEED Gates MicroRate CBA Gates GIRAFFE DOTS IFC GIIRS EDC OECD/DAC B Lab Impact Rating Listen First Mango Fair Trade BACO Acumen Ecological Footprint PPI Grameen Measuring Impact WBCSD 13

14 Methods & Tools Output Outcomes Impact EDC OECD/DAC Trucost Trucost Social Value Matrix Root SROI REDF SROI Social E-valuator Cradle to Cradle C2C Strategy Landscape CEF SPI CERISE EDC OEDC/DAC Trucost Trucost Social Value Matrix Root SROI REDF SROI Social E-valuator EDC OEDC/DAC Trucost Trucost BCA Abt Associates Dalberg Approach SROI Social E-valuator PSIA Worldbank Measuring Impact WBCSD 14

Methods & Tools http://trasi.foundationcenter.

15 Methods & Tools Always Keep In Mind Not everything that counts can be counted, and not everything that can be counted counts. 15

16 Appendix 16 Global Impact Investing Global Impact Network, Investing 2013 Network 2013

17 Who s using IRIS? Selection of IRIS Registered Users (iris.thegiin.org/registry) Selection of Investors Endorsing IRIS 17

18 IRIS How and was IRIS Microfinance developed? IRIS has been working with the MIX and SPTF since 2009 to ensure alignment 18

19 IRIS Activities in 2013 Offer a Universal Language Support IRIS Adoption Facilitate Data Access Improve the navigation of the metrics library Release an IRIS upgrade Continue to increase the coverage and relevance of IRIS metrics Increase engagement with other standards-setting bodies Launch a getting started guide Continue engagement with our adoption partners Hold trainings to further support IRIS adoption Develop data-driven research in collaboration with partners Create user-friendly tools to facilitate data collection 19

Impact Investing: Strategies for Mobilizing Private Capital for Ghana s Transformation Agenda

Impact Investing: Strategies for Mobilizing Private Capital for Ghana s Transformation Agenda Edward T. Jackson A Lecture and Panel Discussion, The Mövenpick Hotel, Accra, October 20, 2015 Impact Investing: