Guide to the characteristics
As the global champion for the impact investing industry, the GIIN has been advocating for the use of investment capital to contribute to improvements in people’s lives and the health of our planet since our founding in 2009. The amount and diversity of capital for impact investing has increased dramatically in the past ten years, but more capital is needed—capital that truly contributes to positive benefit creation—to address the pressing challenges of our time. This is why the GIIN has made scaling the market with integrity a key focus of our ambitions for the market in this next phase of our work.
The draft set of characteristics below outlines a baseline of values and behaviors that investors apply with the portion of their assets used for impact investments. This work complements our definition for impact investments and the core characteristics of impact investments.
The four characteristics below are each underpinned by specific actions, and will be linked to resources that provide standards, guidance, or tools to support implementation. Implementation is a journey, and the GIIN embraces investors at all stages in that journey.
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Title TBD (the characteristics of impact investors)
We as impact investors believe that all investors have agency in shaping social and environmental effects through our investment decisions. We believe impact investors own and act on this agency by managing the impact of our investments towards positive contributions to people and planet. We are accountable to delivering impact performance in line with our investment objectives and to demonstrating behaviors designed to realize these objectives.
The Impact Investor's Worldview
We as impact investors hold as truths:
- Financial markets are central in driving solutions to critical threats facing the world and realizing opportunities to generate benefits for people and planet
- Every investment, regardless of intention, contributes to short- and long-term positive and negative social and environmental effects
- Impact investing has a role to play in generating solutions to these critical threats and realizing opportunities to create benefits in the pursuit of a just and sustainable world
- Transformative change requires deliberate and coordinated action from each actor in the impact investing industry
The Actions Taken by Impact Investors
We as impact investors:
- Intend to Contribute to Positive Social and Environmental Impact. At each stage of the investment process, we make decisions that further both our impact and financial objectives. We do this by:
- Articulating an investment thesis that is explicit about our financial and impact strategies, intentions, and constraints, and then setting realistic goals in line with them
- Considering the interests of affected stakeholders, such as shareholders, customers, suppliers, communities, or global and local environments, at each stage of the investment process
- Acknowledging that the delivery of benefits to people and/or the planet requires consideration of long-term implications while also keeping in mind urgent, near-term challenges
- Make Informed Decisions About Impact. We use best available data and information to improve our ability to contribute to positive impact. We do this by:
- Identifying a clear and established social or environmental need and setting goals and expectations about our investment’s contribution to improvement in line with the scale and depth of that need
- Designing investment strategies based on the best data and information available regarding which solutions contribute effectively to positive impact and what negative impacts are possible in the context of the investments
- Set targets based on best available information by which to gauge performance and make decisions
- Manage Impact. We manage our investments towards achievement of our social and environmental objectives. We do this by:
- Considering risks to achieving our stated impact goals
- Measuring and managing against these impact goals and risks, by endeavoring to collect and use data on impact performance through the life of an investment
- Holding ourselves accountable to our stated impact performance goals and expectations by disclosing actual performance at a minimum to investors and investees
- Committing to learning and updating our investment strategies as evidence is available about how positive and negative impacts are delivered
- Seeking to mitigate the negative consequences of our actions in addition to our focus on creating positive impact
- Considering and iterating our strategies based on evidence of actual impact performance vis-à-vis affected communities (people and planet)
- Contribute to the Effectiveness of Impact Investing. We facilitate the effectiveness of impact investing and our own impact investments in contributing to positive social and environmental impact. We do this by:
- Committing to using shared industry language, approaches, and methodologies to establish impact investing norms, which will offer more investors clear pathways by which to join the movement
- Respecting the roles, opportunities, and constraints of different types of capital and different types of investors, and seeking to understand how each contributes to this field
- Factoring impact performance and impact management practice into our assessment of prospective co-investors and investees
- Sharing positive and negative learnings, evidence, or data to improve the industry’s overall effectiveness in creating social and environmental benefit
- Being transparent about financial and impact intentions and strategies