Sean Tennerson at the Case Foundation argues for common data standards and strategies in impact investing as the space matures to meet the needs of Millenials like herself.
Key Message
Projected growth in impact investing will require greater accessibility to relevant information, increased transparency on actual impact performance and standardized KPIs. She believes that data should be at the center stage to power the next stages of impact investing’s growth.
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By data, I mean the details about who, what, where and how in impact investing. This information is essential to power tools, like the Network Map and other resources that can spur more investment and drive greater efficiency in the impact investing market. These details can be hard to locate if you’re not familiar with the space (to be fair, even if you are familiar with the space) because information is widely dispersed, when it is available it’s rarely transparent and it’s difficult to synthesize trends across the field because there’s no fully standardized language and metrics for reporting.
Alright, we know the data is an obstacle – let’s get real about solving it. From what I have seen and heard during the Network Map discovery process, the data exists and there is interest in improving accessibility – we just have to find the right levers to pull. Right now, we can find a good deal of information in reports from individual funds and investors like Unitus Seed Fund, K.L. Felicitas and F.B. Heron Foundation; from groups like ImpactSpace who are committed to greater public access to information; in press releases like this one announcing social enterprise, Workit Health raising $1.1 M; and even on Twitter – try searching “raised #socent #impinv.” Knowing that the data exists, how can we start to better put it in the hands of those we want to activate? …
Nick Ashburn, a Director of Impact Investing at the Wharton Social Impact Initiative, in a related December article weighing in on data’s importance, the milestone their team had reached, 100 impact investing private equity funds in its Wharton Impact Research and Evaluation Database (WIRED). The database includes funds in developed and emerging markets.
But that’s just in private equity. Some investors are utilizing impact investing strategies across asset classes, including in public markets.
For instance, we’re currently working on a project to better understand the dynamics of public equity funds that market themselves as having a focus on women and girls. What gender-related factors are these funds tracking, and what’s the financial performance? As a possible gender-lens investor, what does the research base show about which indicators might improve the lives of women and girls?
Questions like these naturally remind us of the discussion around the ‘impact’ in impact investing and the variety of strategies and philosophies there. Some investors are interested in the impactful outcomes of their investments’ products or services. Others are more concerned with the business operations of the specific companies in which they’ve invested (for example, energy and water efficiency or human resource practices). And still other investors are considering impact-related factors as a potential way to better measure and quantify their exposure to possible risks in the market…
Sources: Green Money Journal, Wharton
