ImpactAlpha, May 16 – Some fund managers link staff incentives to impact results. Others verify outcomes with target stakeholders. Many regularly assess impact risk. A few stand out amongst their peers.
AgDevCo, BlueEarth Capital, Calvert Impact Capital and Nuveen Fixed Income Impact have joined a leaderboard curated by BlueMark of impact investors with top-tier practices for managing the impact of their investments. The impact verification firm’s latest “Making the Mark” report aims to benchmark such practices.
The list of BlueMark’s top-performing clients also includes Bain Capital Double Impact, LeapFrog Investments and Trill Impact, among others. “Continuously raising the bar on best practices is the key to scaling this field with integrity,” said Christina Leijonhufvud of BlueMark. “Improved data is central to improved decision-making.” (Disclosure: BlueMark is an ImpactAlpha sponsor.)
Independent verification of investor impact management processes has taken hold in an industry-wide push to establish clear principles for practice. More than 170 investment firms have signed onto the Impact Principles, which the International Finance Corp. transferred to the Global Impact Investing Network last year.
BlueMark’s report analyzes 84 verifications the firm has completed for investors managing $209 billion in impact-oriented assets under management.
More than half of investors include an assessment of impact risk in due diligence, though only a quarter assess the potential for negative impacts (for context, see “How investors can better assess risk to impact”). Less than a third of managers engage with investee workers or customers to verify impact, an uptick year-over-year.
Verification isn’t a check-the-box exercise, says Leijonhufvud, but a learning process meant “to encourage a ‘race to the top.’”