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Impact Measurement and Management: 77% of impact investors align their priorities with global development goals | GIIN

INSIGHT by GIIN

investESG on 2023-08-07

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Global Impact Investing Network (GIIN) research highlights increasing sophistication of Impact Measurement and Management (IMM) practices

The report underscores the need for industry analytic tools that help investors utilize impact performance data and allocate capital to the most effective solutions

Last week, the Global Impact Investing Network (GIIN) published the third report in its 2023 GIINsight series titled Impact Measurement & Management Practice. The report highlights insights based on data collected from over 300 impact investors on their impact measurement and management (IMM) practices and offers the most comprehensive overview of IMM practice to date. This research will help the industry better understand how impact investors are assessing the social and/or environmental impacts of their investments and, crucially, how they are using impact performance data to inform their investment decisions.

"Our research reveals that impact investors are aligning more and more with global development goals to tackle key environmental and social issues. Industry leaders are piloting innovative analytical tools and data systems to amplify impact performance in their target sectors. This not only elevates impact investment standards but encourages investors to continually set more ambitious goals, resulting in greater positive outcomes for their capital."

-Amit Bouri, GIIN's CEO & Co-founder

Key findings from 2023 GIINsight: Impact Measurement & Management Practice

Over two-thirds of impact investors (77%) align their impact priorities with global development agendas, such as the Paris Climate Accords and the United Nations Sustainable Development Goals (UN SDGs).

Among impact investors who set specific quantitative impact targets, 61% do so at the investment level and 52% of investors do so at the fund level.

By and large, the most commonly used tools and systems for IMM include IRIS+, managed by the GIIN, with 78% of impact investors reporting using it. Other tools and systems include Sustainability Accounting Standards Board (22%), Global Reporting Initiative (19%), B Analytics / Global Impact Investing Rating System (16%), Harmonized Indicators for Private Sector Operations (12%), Joint Impact Indicators (12%), Aeris Cloud (4%) and Global Alliance for Banking on Values (3%).

Only 15% of impact investors compare their impact results to peer groups; yet, 76% of investors considered the inability to compare impact to peers a significant or moderate challenge in the industry, underscoring the need for more industry impact performance analytics.

To date, just under half of investors (49%) are audited either internally or externally for impact management processes, and 46% of investors are audited specifically on their impact results or performance.

“To scale the industry with integrity requires practitioners and field-builders to overcome data challenges and mainstream the use of impact data in the investment process. Impact investors have a strong leadership opportunity to share impact data at scale to enable the development and uptake of robust, cutting-edge analytic impact intelligence tools.”

-Dean Hand, Chief Research Officer at the GIIN

The GIIN will release one more report as part of this year’s four-part 2023 GIINsight series. The forthcoming report will explore emerging trends in the impact inves􏰀ng industry. To view the full series of reports, please visit this link.

about

The Global Impact Investing Network (GIIN) is the global champion of impact investing, dedicated to increasing the scale and effectiveness of impact investing around the world. Impact investments are investments made into companies, organizations, and funds with the intention to generate positive, measurable, social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets and target a range of returns from below market to market rate, depending upon investors’ objectives. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. For more information, please visit www.thegiin.org.

All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.

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