In order for the impact investing industry to reach its potential, the market requires a system for measuring and managing impact results, a methodology for rigorously analyzing and comparing standardized impact data, and a willingness amongst investors to share impact performance data and contribute to the widespread uptake of the analytics they produce.
The GIIN is leading efforts to build this industry infrastructure, both through the development of IRIS+, as well as through its Understanding Impact Performance research, which presents a real-world application of the methodology outlined in this paper.
In this discussion paper, Methodology for Standardizing and Comparing Impact Performance—a first of its kind analytic methodology for understanding market-, portfolio-, and investment-level impact performance—readers can explore this groundbreaking new approach for comparing impact results from one investment to another. This methodology aims to create opportunities for investors to: select investments with high impact potential more effectively; integrate impact and investment management to optimize results; develop responsible exit strategies and time horizons; and strengthen disclosures of impact. This discussion paper defines each step of the analytic methodology and discusses key decisions within its development process.