The Impact Reporting and Investment Standards (IRIS) initiative of the Global Impact Investing Network will advance a common framework for defining, tracking, and reporting the performance of impact investing capital. Significant progress has already been made in sectors like microfinance, where data aggregation and rating tools have been developed to help measure impact. The IRIS initiative builds on these sector-specific efforts to create a common language that will allow comparison and communication across the breadth of organizations that have social or environmental impact as a primary driver.
IRIS is an essential element in the evolution and maturity of the social and environmental impact investing market. By establishing a common language for measuring and reporting performance, IRIS forms a basis for enabling infrastructure and leads to transparency and credibility. Ultimately, IRIS will lead to a more efficient impact investing marketplace that steers significant sums of money to market-based solutions that achieve development outcomes.
In support of IRIS, the Rockefeller Foundation is committing ,000,000 of support over two years, and the U.S. Agency for International Development is matching their gift with ,000,000 over two years. Pioneering impact investing organizations--Acumen, B Lab, E+Co, Pacific Community Ventures, Root Capital, and Small Enterprise Assistance Fund--are piloting IRIS. Acumen Fund has developed its performance management software, Pulse, to be IRIS-compatible and eight impact investors are piloting the system: Acumen Fund, Agora Partnerships, d.o.b. Foundation, IFMR Trust, Kellogg Foundation, LGT Venture Philanthropy, Root Capital, and Skoll Foundation.
In order to advance this effort, the GIIN and its partners will take responsibility for the following activities over the next two years:
- Further developing the impact measurement taxonomy.
- Promoting the adoption of the standard terminology by impact investing industry participants.
- Working with select impact investors to set up the required technology to either begin capturing data in accordance with the new standard or conform existing data collection to the new standard.
- Maintaining a data aggregation platform that is updated and draws data from the users of the standardized terminology.
- Coordinating an Advisory Committees which will participate in the governance of the taxonomy, the technology platform, and efforts to increase adoption of the standards.
- Collaborating with Acumen Fund, which will take responsibility for broadening the adoption of the IRIS-compliant Pulse system.
The impact investing industry has the potential to steer significant sums of money to market-based solutions to the world's most pressing challenges. A rapidly growing number of investors are seeking to place capital in impact investments that will generate both social or environmental value and financial returns, at a minimum returning principal capital to investors and in many cases offering market-rate or even market-beating financial returns.
Despite this momentum, the nascent industry remains beset by inefficiencies and distortions that currently limit its impact and threaten its future trajectory. One of the key limitations to the growth of the impact investing industry is the lack of transparency and credibility in how funds define, track, and report on the social and environmental performance of their capital. This leads to higher transaction costs and a limited ability to understand the impact of investments. Transparency, credibility, and enabling infrastructure are required for participants to more fully capture the value of the marketplace.
SEEKING: Financial resources, implementing partners, media/marketing opportunities
IRIS is a reporting standard for the social and environmental performance of impact investments. IRIS provides a recognized set of performance measures that have been developed by industry experts and are aligned with established standards where they exist. Standardized social and environmental performance reporting will enable both fair comparisons between mission-driven enterprises and funds, and industry benchmarks that indicate average social and environmental performance. In order for credible benchmarks to be developed, many and varied mission-driven enterprises must report their performance using IRIS. Further, they must share their data anonymously with the Global Impact Investing Network, which will compile this data to create industry benchmarks. The Global Impact Investing Network is seeking implementation partners to help increase the adoption of IRIS, and media and marketing partners who can increase awareness of IRIS so that more mission-driven businesses and funds will report social and environmental performance using the IRIS standards. Additionally, the GIIN is seeking additional financial support to enable more rapid expansion and adoption of the IRIS standards, and to support the growth of IRIS beyond its initial two years.
OFFERING: Implementing partners, best practice information, media/marketing opportunities
IRIS is a public good which is available as a best practice to anyone interested in tracking social or environmental performance of enterprises. The Global Impact Investing Network can offer IRIS implementation support, in order to encourage IRIS adoption by many mission-driven businesses and funds at once, through partnership with membership organizations and networks of impact investment funds.
In addition, businesses and funds that report IRIS data anonymously to the Global Impact Investing Network enable performance benchmarking, which will become a public good they can access to better understand their performance relative to their peers.
The Global Impact Investing Network will encourage IRIS adoption by promoting successful IRIS adopters in the impact investing sector through press outreach, speaking engagements, and other GIIN marketing materials such as the GIIN website.