Concerns about accusations of ‘impact washing’ is driving demand for third-party assessments of impact practices and reporting.
New York-based BlueMark raised $10 million to expand its verification business, including from three Singapore-based investors that are encouraging the firm to expand its activities in Asia.
“We want all investments to be accountable for impact and BlueMark to be the mark of impact, integrity and quality,” BlueMark’s Christina Leijonhufvud told ImpactAlpha. “We are helping make life easier for capital allocators to sort between the wheat and the chaff. We’re a real antidote to the trend of impact washing and greenwashing.”
S&P Global’s venture unit led the Series A financing, with participation from Temasek Trust Capital, the Singapore sovereign wealth fund’s philanthropic arm, and Blue Haven Initiative, Gunung Capital, and Tsao Family Office. Ford Foundation and Radicle Impact, which invested in BlueMark’s $2.25 million seed round last year, also committed new capital.
Since 2020, BlueMark has completed 125 verifications for investors with more than $200 billion in combined assets under management. Much of its practice has centered around the the Operating Principles for Impact Management (see, “‘Operating principles’ help investors hold asset managers accountable for impact”). Increasingly, the firm has also assessed investment firms against Europe’s Sustainable Finance Disclosure Regulation, or SFDR, and other frameworks. The firms also verifies firms’ impact reporting as well as the criteria for sustainability-linked loans and bonds.
Some asset allocators are adding impact verification to their due diligence questionnaires. Leijonhufvud said British International Investment retains BlueMark to assess prospective fund managers as part of its standard process.
“We do have clients who are committed to learning and improving and the fact that we approach the service in a way that provides the client with insights as to how they can improve and fill their gaps and so on is appealing to them,” Leijonhufvud said.
“Probably the majority of clients are first and foremost motivated by fear of being accused of impact-washing,” she added. “I do think, certainly, that CYA is a motivator.”