Driving integrated
An integrated measurement approach The global business landscape is undergoing a perceptible shift. regulation (on one hand) and social and environmental impacts (on the other hand) has come to the fore, and can no longer be ignored. Traditional operating models are being challenged, prompting businesses and investors to turn their attention to the social and measure and drive it. metrics are particularly important to investment decisions in emerging markets, 1 2 outcomes are challenging traditional operating models and prompting the commercial sector to turn attention to the social and environmental impact of their ventures. range from a focus on environmental, social and governance issues 3 unison. These differences are not trivial, since goal-setting drives measurement and measurement drives business behavior. more closely. 1 CCaSS Institutional Investor Survey 2 o orro s invest ent rules lo al survey o institutional investors on non nan ial er or an e 3 Impact investing
and drive also echoed in integrated reporting initiatives, like the International has broader applicability across other sectors too. disclosures, and a clear corporate strategy on value creation, of industries, including industrials, mining and metals, consumer products and manufacturing. In addition, impact investing measurement. 5 businesses generating measurable, and positive, social and environmental outputs are more likely to achieve competitive and commercially meaningful. trade one for the other. o orro s invest ent rules lo al survey o institutional investors on non nan ial er or an e Impact investing 4
performance are aggregated across the portfolio and used by deal teams and foundations have broader applicability to other sectors and provide in measurable outputs and outcomes (purpose), and integrates including deal teams, investors and management, to monitor and drive performance. 5 Impact investing
Portfolio gross revenue Portfolio people reached 60 25 US$ millions 50 40 30 20 10 Millions 20 15 10 5 0 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 0 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Emerging consumers Total Women and children Portfolio good governance and policy 100% 8 90% 80% 7 70% 6 60% 50% 40% 30% 20% 10% Millions 5 4 3 2 0% Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Policy completeness Policy formalization 1 - Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Life Health Pensions Non-life Savings/investment Emerging consumer customers Impact investing 6
performance are essential to a clear business strategy on value creation. 6 societal impact, e.g., reduction in poverty, are not used to drive business behavior. A business has limited reach and therefore a impact such as poverty reduction or a cleaner environment, but a multitude of variables, including consumer choice, means that has found that in order to drive business behavior, it is necessary Inputs Activities outputs outcomes Impact Operations Quality products and customer retention sustainability top talent and risk management relevant products in Different life choices poverty terms mitigate risk Different investment choices 6 Tomorrow s investment rules 7 Impact investing
To invest in companies that provide people across Africa and Asia and, in so doing, generating top- are seen as intrinsic contributors to building successful business metrics provide a good means to identify indicators of social outputs for a range of business across many sectors. It is essential Impact investing 8
In the insurance sector, there is a strong business case for creating make better investment decisions for their future (purpose). In the 7 This indicates the average number of days it takes an insurer to pay a claim upon receipt of full claims These rates refer to a measure of the voluntary products, it also acts as an indicator of the value of the This is a measure of the number of claims to the end consumer. These ratios indicate the value of claims relative to premiums paid. This ratio can be an indicator of product on the life cycle of the product. 9 Impact investing
energy production could have an impact on the reduction of a emissions (environmental). A company in this sector could turn communicate them to the market. Opportunities for driving impact move from measuring social performance to driving it. social metrics. Integrated reporting and its application to models measurable outputs and outcomes as a means of achieving impact. measuring impact. They monitor changes in behavior as a result services, health, education and environment. correlating outcomes to impact is an opportunity for commercial pressing societal problems. Impact investing 10
Notes 11 Impact investing
Notes Impact investing 12
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