How to report on impact is a much-debated topic within the impact investing industry. To create a common ground for impact reporting, Impact Frontiers Executive Director Mike McCreless has created a set of impact reporting norms, based on a public consultation. Together with Impact Manager Rebecca Spohrer, Rosl Veltmeijer discusses these norms and how they were developed as well as the general challenges and pitfalls of impact performance reporting.

Impact Performance Reporting Norms

Impact Frontiers' Impact Performance Reporting Norms establish shared expectations for the reporting of impact results by asset managers in private markets. They are the result of an 18-month public consultation among more than 350 asset managers, asset owners and allocators, consultants, and assurance and verification providers.

The goals of the Reporting Norms are:

  • To facilitate the flow of information about impacts experienced by stakeholders and the natural environment to inform investor decision-making;
  • To make reporting less onerous for asset managers preparing reports, and more useful for asset owners and allocators receiving reports;
  • To provide a set of non-proprietary criteria against which independent reviewers may assure or verify reports; and
  • To offer a market-tested prototype for future disclosure standards by regulators.

The Reporting Norms address a gap in the set of impact standards, frameworks, and guidance that investors already use. They are designed to guide the creation of impact performance reports shared privately by fund managers with their capital providers under non-disclosure agreements. This facilitates reporting of both positive and negative information, including information not publicly sharable. They may also guide the creation of public reports, recognizing that confidential information may need to be excluded.

An important conclusion is that standard KPIs often do not quite fit. A good KPI is a KPI impact investors trust to be a true and valid indicator of the impact they are trying to create and that the stakeholders experiencing the impact have expressed is important to them.

Moderator Rosl Veltmeijer

That’s the kind of KPI that feels justified to make (investment) decisions on and managing towards as an organisation. Standardisation only makes sense if there's general consensus on what should be measured and what the underlying concept of different indicators is.

Getting to a balance of standardised and comparable KPIs, supported by standardised and comparable concepts, will be the next evolution in impact management.

 Listen on Spotify or via RSS.

Also available on:

 

 

Tune in for more!

The Inside Impact Investing podcast

Tune in to our podcast series and listen to leading experts share their insights on a variety of topics - all through an impact lens.

Find our other podcasts here.