12 December 2011

A Data Tonic for Impact Investors: GIIN's New Metrics

The quest for common language and metrics may not be the Holy Grail, but for impact investors it's pretty close.

Now, the folks at the Global Impact Investing Network (GIIN) have provided, if not the grail, at least a tonic for the growing community of impact investors.

Broadly defined, impact investors deliberately set out to invest for social and environmental impact. (Yes, really.) Until now, it's been difficult for such investors to fully evaluate their investments by financial performance data alone.

The new report is called Impact Reporting and Investment Standards (IRIS) and it supplies the first holistic performance analysis for the impact investing industry.

A number of organizations have tried to develop their own metrics for social and environmental performance -- at Ashoka we long had one set of impact metrics in development -- but typically these have been inconsistent, inefficient and don't allow for comparisons across the board.

The new report coming out of GIIN's IRIS initiative presents early findings from nearly 2,400 organizations, ranging from microfinance institutions to mission-driven organizations. There is still a long way to go, but the hope is adoption of the IRIS methodology by a wider audience of companies, organizations, and funds will strengthen the market intelligence of this growing asset class.

And more and better data with proper comparative analysis should lead to better informed investments across the impact investing community and make for a more efficient and effective use of capital. Now that sounds like good gin to me.

You can download the report here (PDF): Data Driven: A Performance Analysis for the Impact Investing Industry