Impact is tricky !
Many investors have gone from supporting business models that do less harm (e.g. using ESG principles to filter out businesses that harm the environment or have poor working conditions) to making impact investments and building businesses that actively deliver solutions to global issues.
While these investors pursue diverse impact objectives, they universally agree on the importance of measuring and managing their impact. But Impact measurement and management (IMM) is tricky!
Investors need help and tools to strengthen their impact screening and find the right startup to invest in.
This is where we intervene.
When looking at positive impact startups and ventures, impact investors have in mind multiple global development agendas, such as:
The Sustainable Development Goals
United Nations members adopted the 2030 Agenda for Sustainable Development in 2015. The Agenda comprises 17 Sustainable Development Goals that represent a call to action to address social inequities while protecting the planet.
The Paris Agreement
It falls under the United Nations Framework Convention on Climate Change and is a global action plan to combat climate change.
G7 and G20
Impact investing has also been featured prominently at recent G7 and G20 summits.
To pursue these agendas, many tools and frameworks have been developed to help investors measure the impact of their investees. Most investors use more than one system or framework in their IMM practice.
The 3 most commonly used are:
The United Nations Sustainable Development Goals
The IRIS Catalog of Metrics and IRIS+ Core Metric Sets developed by the GIIN
The Impact Management Project’s (IMP) Five Dimensions of impact
Many other tools and principles establish behaviours and processes to follow: the UN Principles for Responsible Investment (UNPRI), the International Finance Corporation’s (IFC’s) Operating Principles for Investment, the Aeris CDFI ratings system, the Global Reporting Initiative (GRI),…
At Positive Impact Makers ©, our methodology is based on these 3 most broadly used frameworks (the SDGs, the IRIS+, the IMP’s five dimensions). It allows impact investors to efficiently identify and select their targeted impact and it offers standardized data collection and reporting.
Even if not all information or data are available for all dimensions or key questions we ask, we constantly encourage startups to progressively fill in the blanks in order to attract investors.
It is structured as follows:
WHAT positive impact do you seek in the world thanks to your project or company?
This dimension helps us identify and communicate to investors the positive outcomes you are contributing to, how they can be measured and how important the outcomes are to those who (currently or will) benefit from them.
WHO is affected?
This dimension describes the target stakeholders (people or planet) affected by your project or business.
HOW MUCH change is happening and could be happening if your project was backed by investors?
This dimension highlights the scale and depth of the change that is or could be happening.
What is the impact RISK?
We assess with you the likelihood that impact will be different than expected.
HOW is change happening?
We also ask you, depending on your project or business, additional questions to understand how you deliver your value (production process, supply chain,…).
How do you manage and mitigate against potential NEGATIVE impacts?
We assess your strategies to actively manage and mitigate against the negative impacts that could be triggered by your project or company.