Beats | April 4, 2019

Core characteristics and operating principles to help impact investing scale with integrity

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, April 3 – Investors want to know the terms of participation in the growing impact investing market, says the Global Impact Investing Network. The GIIN’s answer goes beyond its standard definition to include the “core characteristics” of the practice. “Scale is essential,” said the GIIN’s Amit Bouri. “But it must be scale with integrity, to ensure we are achieving impact at scale, not just capital at scale.”

The characteristics include: intentionality to contribute to measurable social or environmental benefit, use of evidence and impact data in investment design, management of impact performance and contribution to the growth of the industry. “Our priority is to set appropriate expectations and define practices in a way that is useful to an investor building or deepening an impact investing portfolio, to support greater participation from both new and experienced impact investors,” said the GIIN’s Sapna Shah.

  • Impact management principles. Next week, global investment firms and development finance institutions are expected to adopt the International Finance Corp.’s operating principles for impact management,” a set of specific standards for impact investments. The aim: to combat “impact washing” while providing an onramp to impact investing for institutional investors sitting on trillions of dollars in assets. Other industry groups are mobilizing around sets of standards as well.
  • Community voice. “We believe the next challenge for the industry will be incorporating end-user feedback,” said the UK’s Big Society Capital Evita Zanuso. “This will ensure that the social or environmental impact is being felt where it’s most needed.”