Impact investment is about deployment of capital to generate financial return and social and/or environment impact. One of the biggest challenges is to choose the correct metrics and methodologies to report impact creation which justify our success as an impact investor. Unlike financial returns which are intuitive and standardized, impact returns are polymorphous since different investment projects will create different impacts, which may also change during different phases of the projects. AvantFaire as a fund of impact investment funds manager, we face an additional layer of difficulty in reporting since we need to aggregate impacts from a portfolio of impact investment funds. Like other practitioners in the impact investment industry, we are still searching for the most practical and effective approach to measure and report impact.
As a signatory to the Operating Principles for Impact Management (OPIM), we appreciate very much that the International Finance Corporation of the World Bank Group, which leads OPIM, issued a Call to Action Towards Common Standards for Impact Measurement and Reporting on March 16, 2021 that encourages not only the signatories but also the impact investment industry to (1) use the Joint Impact Indicators on jobs, gender equality and environment & climate when measuring and reporting on their impact, and (2) to collaborate on the identification of a core set of impact metrics, with the aim to define the minimum scope for impact measurement and reporting for all impact investors.
We are proud to be one of first 119 impact investment practitioners, along with the members of the Association of European Development Finance Institutions (EFDI), to endorse the Call to Action. We will strive to implement the Joint Impact Indicators in our fund management operation and to promote them in the industry going forward. For more details about the Call to Action, please refer to the announcement at IFC.org or visit the OPIM website at https://www.impactprinciples.org/signatories-reporting. Let’s work together to flourish the impact investment industry with real action!