Step 1: Educate yourself
Overview of trends in impact managing and what others are doing
- Impact-Financial Integration: A Handbook for Investors presents methods of impact financial integration developed and applied by the Impact Frontiersalong with examples and lessons learned.
Measuring Effectiveness: Roadmap to Assessing System-level and SDG Investing, examines how investors can chart a course to assess system-level issues (like those contained in the SDGs) appropriate for their specific situation, and then establish effective goals for influence against which to measure progress. In doing so, investors also can assess the potential usefulness of the tools available to them and the effectiveness of the tools they have selected. Ultimately, this approach enables investors to assess their influence in determining changes at the system-level itself and the potential contribution of their efforts and investments.The report is authored by William Burckart, Steve Lydenberg and Jessica Ziegler of The Investment Integration Project (TIIP) and was sponsored by the Investor Responsibility Research Center Institute (IRRCi).A companion document to the report, Measuring Effectiveness: Roadmap to Assessing System-level and SDG Investing-Supplemental Appendices, contains a series of appendices that provide tools and examples for investors, as well as additional context for and information about the concepts discussed.
Step 2: Set impact goals
Articulate desired impact and outcomes you are looking for and establish a clear investment thesis
- The Impact Management Project (IMP) aims to provide consensus on how to talk about, measure and manage impact, bridging the perspectives of 700+ investment, grantmaking, business, non-profit, social science, evaluation, wealth management, policy, standard-setting and accounting practitioners (among others).
Toniic SDG Impact Theme Framework links impact investing themes to the United Nations’ Sustainable Development Goals (SDGs). The goal of the framework is to allow impact investors to align their investments with the SDGs and the thereby find greater alignment and synergy in global investment opportunities
Step 3: Select relevant metrics and collect data
Global Impact Investing Rating System (GIIRS), B Lab - Data platform for collecting, benchmarking, and reporting on social end environmental impact of companies and funds. Features include pre-built metric sets, goal-setting functionality for investors, and the largest dataset of private company impact data.
Impact Reporting and Investment Standards (IRIS) - IRIS metrics are designed to measure the social, environmental and financial performance of an investment. You can filter based on your investment priorities and focus areas. Started with reading Getting Started with IRIS.
- Global Reporting Initiative (GRI) Standards - The GRI Standards lists over 400 indicators on on a range of economic, environmental and social impacts. Sustainability reporting provides information about corporate sustainability performance.
Sustainability Accounting Standards Board (SASB) Navigator - Sustainability research platform that helps investors find which ESG issues impact corporate performance and how well companies are disclosing on those issues.
- Navigating Impact -Created by the Global Impact Investing Network (GIIN), the database helps investors select impact strategies and adopt metrics that indicate performance toward their goals.
Access Impact Framework - Cornerstone Capital Group’s framework illustrates how portfolios align in support of the UN Sustainable Development Goals (SDGs) through a focus on access — access to the natural, human and economic resources.
Step 4: Analyze and report on impact
Toniic Impact Portfolio Tool – Version 2 - An Excel-based tool that allows an investor to classify every underlying investment by its intended impact, as well as other variables that investors take into consideration when designing their portfolios — such as liquidity, expected returns, geography, management structures, and more. The outputs of the tool are visual representations of the individual portfolios.
- For a list of companies that offer tools that make it easy to collect and report performance on SASB standards, see here.
Step 5: Revisit your impact management strategy
Assess whether you are on track to meet your targets and how your investment strategies can be improved.