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The GINN
The Global Impact Investing Network (GIIN) published two sector reports, Understanding Impact Performance: Agriculture Investments and Understanding Impact Performance: Financial Inclusion, which analyze the impact performance of agriculture and financial inclusion impact investments and showcase the real-world results associated with impact investments.
With increasing financial volatility and rising food insecurity associated with the current COVID-19 crisis in many parts of the world, impact investors are working to advance access to financial services and strengthen the agriculture sector. The reports, which follow the clean energy and housing reports released in October 2019, mark the significant steps being made by the GIIN towards standardizing impact performance analytics and increasing the transparency and availability of comparable impact data for investors.
Lack of transparency and comparability of impact results have remained a top challenge facing the impact investing market. Last year, the GIIN piloted its impact performance initiative to push for greater knowledge-sharing around transparent and comparable data. Building on the GIIN’s decade of experience standardizing impact metrics and establishing the IRIS+ system, the GIIN is raising the bar on standardizing impact performance analytics, which will lead to the establishment of industry benchmarks and ratings.
“As the world focuses on an inclusive, sustainable recovery from the COVID-19 crisis, impact will be front and center for investors contributing to the recovery,” said Amit Bouri, Co-Founder and CEO of the GIIN. “For over a decade, our global network has been working to increase the rigor of impact measurement and management though the development of the IRIS+ system. Today, the use of IRIS+ impact metrics is enabling impact investors to begin comparing their impact performance and allowing investors to better understand how they are performing when it comes to achieving impact results.”
Key Takeaways:
- Impact results among agriculture investments demonstrate material progress in at least four crucial areas: (1) increased environmentally sustainable farming practices; (2) improved smallholder farmer yields; (3) increased rural income and profitability; and (4) increased rural employment.
- Among financial inclusion investments, impact results demonstrate material progress in at least four crucial areas: (1) decreased reliance on solely informal networks; (2) increased spending on basic services; (3) accelerated business expansion; and (4) improved financial resilience.
- Impact investors demonstrate increasing cohesion around standardized sets of metrics, such as the IRIS+ Core Metrics Sets, as well as standardized methods for collecting, calculating, and reporting performance aligned with these metrics. Consistency in these areas is critical to enabling comparison of results, which will lead to establishing industry benchmarks and ratings.
Methodology for Standardizing and Comparing Impact Performance
The GIIN has also released a new methodology for analyzing impact performance for public comment on November 12, which will ensure greater accountability among impact investors to demonstrate their impact results and equip investors with the ability to seek high-potential impact opportunities. Following a public comment and peer review period, the methodology will be finalized for release in 2021.
