An impact performance benchmark is an analytic assessment tool or product that displays investment-level impact data within a specific sector. A benchmark allows investors to analyze and manage the impact performance of investments based on real-world data. The IRIS+ impact performance benchmarks assess the impact of participating investors’ investments across key performance indicators (KPIs), thus enabling any user to compare its investments’ impact to that of peers. Further, the tool enables benchmarking relative to the progress required to achieve the Sustainable Development Goals (SDGs) [1] by calculating the annual change needed across indicators to meet a given goal by 2030.

The impact performance benchmarks form part of the analytics that are housed in the IRIS+ System. To view all analytics offerings, log into your IRIS+ account here and make sure to claim your organization’s IRIS+ profile here.

There is an industry need for infrastructure to enable rigorous comparisons between investments on the basis of impact. With a rapidly shifting regulatory environment and increased demand to not only demonstrate but also use impact results to manage toward greater impact, the impact performance benchmarks can play a critical role in investors’ investment decisions.

The impact performance benchmarks are built to inform investor decision-making. Asset managers may use impact performance benchmarks to inform a range of choices, including:

• conducting due diligence on prospective investments by sense checking baseline impact figures,
• setting impact performance targets in line with market performance and/or the SDGs,
• identifying areas of underperformance and course correcting as needed,
• identifying areas of outperformance and applying learnings to other investments,
• strengthening approaches to impact measurement by coalescing around a shared set of KPIs, building upon Core Metrics Sets, and improving data quality, and
• communicating with LPs or other stakeholders.

Indirect investors, such as many asset owners, may use the benchmarks for the same purposes. Critically, asset owners are likely to use the benchmarks to identify managers through which to invest.

Other industry stakeholders, such as standard-setters, research bodies, academics, network organizations, sector experts, and impact measurement specialists may also use impact performance benchmarks to learn about comparable impact in financial inclusion upon the public launch in 2022.

The first IRIS+ impact performance benchmark launched in March of 2022. The financial inclusion impact performance benchmark is the first in a series of impact performance benchmarks that will roll out within the IRIS+ System.

A preview of the financial inclusion impact performance benchmark is publicly available to view here. The full benchmark - including dynamic features such as filters, hover text providing context, and additional context on the key performance indicators (KPIs) - is available to asset owners and asset managers who have claimed their profile in the IRIS+ System. This can be done by logging in here. 

Additionally, investors who contribute relevant impact performance data can unlock greater depth of insights through analytics tailored to their own investments, including the ability to compare their own results with the market benchmark.

The GIIN team co-designed the financial inclusion impact performance benchmark with a cohort of 13 leading asset managers in financial inclusion called the Benchmark Design Team. The Design Team comprised organizations with a propensity toward leadership, a strong reputation for impact measurement and management, and a track record in financial inclusion. Organizations represented diverse strategies, investing through both debt and equity, in both emerging and developed markets, and into a range of types of financial service providers.

This Design Team informed several key phases of the benchmark product development:

• Product design: Building upon the IRIS+ Core Metrics Sets, the Design Team developed seven KPIs relevant to financial services which reflect investments’ contributions toward two long-term outcomes: (1) financial opportunity and resilience and (2) inclusive economic development. Each KPI includes quantitative and qualitative elements to reflect both scale and depth of impact. The Design Team also described the optimal features of a benchmark (such as dynamic filters). Learn more about the financial inclusion impact performance benchmark here. 
• Data contribution: Design Team members then contributed data for their direct impact investments in financial inclusion to the GIIN.
• Prototype development and iteration: Based on data submissions, we developed a prototype benchmark in alignment with the COMPASS methodology and the optimal product features surfaced by the Design Team (e.g., filter functionality, export functionality, investor contribution analysis). The Design Team then provided feedback and input on these early models for a period of rapid iteration.
• Integration: The GIIN team subsequently integrated this prototype product, as well as a revised data intake tool, into the IRIS+ List to scale product uptake and data contributions.

Additional financial inclusion investors are welcome to contribute data to the financial inclusion impact performance benchmark here. Updates to benchmark product features will be considered and implemented on a rolling basis, as part of a strategy dedicated to continual product improvement.

All data included in the impact performance benchmarks are self-reported. As with all GIIN research, data are reviewed upon submission to identify and correct likely errors. Through the IRIS+ List, all data face a series of validations to check for precision and accuracy with additional, detailed data reviews conducted on a rolling basis. Any likely errors are flagged to the contributing investor for review and confirmation before changes are made.

At this time, the GIIN is not conducting data audits or confirming data validity at its original source (i.e., with the investee company or its direct stakeholders).

The GIIN co-designed the financial inclusion impact performance benchmark with a cohort of leading investors in financial inclusion. This cohort of 13 investors offered their time, thought leadership, and/or impact data on financial inclusion investments:

• BlueOrchard Finance Ltd
• Chiratae Ventures
• Community Investment Management (CIM)
• Elevar Equity
• Grassroots Capital
• Incofin Investment Management
• LeapFrog Investments
• Local Initiatives Support Corporation (LISC)
• Lok Capital
• Nuveen, a TIAA company
• Quona Capital
• Triodos Investment Management
• Triple Jump

The context in which an investment was made is crucial to interpreting impact performance. Naturally, context is built into impact performance benchmarks in several ways to ensure appropriate interpretation of impact results. First, the GIIN team binds analysis at the sector level to ensure that KPIs are relevant and applicable, reasonable to collect, and comparable. Second, the GIIN team incorporates dynamic filters to enable users to explore more narrowly defined peer sets as they see fit. These include filters pertaining to investment strategy (namely investment instrument and time horizon) as well as investee features (namely region of investee operations, type of financial service provider, and investee stage of business). Additional filters will be built into the Impact Performance Benchmarks over time as the dataset grows to unlock further nuance.

The IRIS+ System

The impact performance benchmarks are part of the suite of analytics that will be offered through the IRIS+ System. Users will be able to access the aggregate impact performance data offered through the impact performance benchmarks and will be able to submit data to be added to the impact performance benchmark analytics. To view all analytics offerings, claim your organization’s IRIS+ profile here.

IRIS+ Frameworks

The impact performance benchmark KPIs build upon key indicators found within the IRIS+ Core Metrics Sets. Soon, users will be able to find the impact performance benchmark KPIs within the IRIS+ Core Metrics Sets, creating one cohesive place for all relevant indicators related to a sector. The benchmarks also build on the evidence base found within IRIS+ Frameworks to shed light on investments’ likely long-term outcomes.  To learn more about the IRIS+ Core Metrics Sets, please visit your IRIS+ Frameworks here.

COMPASS

COMPASS is the methodology for comparing and assessing impact, underpinning the analysis presented in the benchmark. The GIIN team followed four methodological steps outlined in COMPASS to bind the benchmark, collect data, analyze data, and enable users to apply insights to their own decision-making. Impact results presented in the benchmark are investment-weighted to reflect investment-level impact. Benchmark figures focus on both scale (impact results at a point in time) and pace (change in impact over time). Further, each KPI includes SDG-aligned threshold targets, when applicable. Such targets enable investors to gauge the extent to which their investments move the needle relative to these global goals.

GIIN impact performance studies

The GIIN’s impact performance studies are research publications that explore impact results across a sample of investments across the following impact themes: Housing, Clean Energy, Financial Inclusion, Agriculture, Climate Change Mitigation, and Quality Jobs. These studies served as an opportunity to analyze impact data using the COMPASS methodology – through this early-stage research, the industry’s benchmarking efforts were born. The impact performance benchmarks represent an elevated methodology from the impact performance studies, building upon those early learnings.

Sector-specific resources and standards?

The impact metrics included in the financial inclusion impact performance benchmark are aligned to third-party sector specific resources (in addition to the IRIS+ Core Metrics Sets), such as the Social Performance Task Force and CERISE, in an effort to drive broader industry cohesion in specific areas.

The IMP’s five dimensions

The IMP’s five dimensions (who, what, how much, risk, and contribution) are integrated into IRIS+ Core Metrics Sets, alongside a sixth dimension (how change happens). As such, they are naturally interwoven into the Impact Performance Benchmark.

Sustainable Finance Disclosure Regulation (SFDR)

To align to Article 9 in the SFDR, funds must have an explicit sustainability objective and integrate those considerations into the investment process. The impact performance benchmarks aid in that process by facilitating greater insights from impact data, thus enabling investors to incorporate impact considerations into each step of investment decision-making and management.

The GIIN will accept data contributions from investors to include more funds and investments in this benchmark. Investors making impact investments into financial services who wish to participate are encouraged to do so by claiming their IRIS+ List profile and then completing the financial inclusion impact performance benchmark data intake form here.

The impact performance benchmarks will be updated on an on-going basis as investors contribute data on the impact results of their financial inclusion investments. This may also be based on how frequently investors wish to update their data in the benchmark. The reporting years represented in the benchmark will be updated accordingly.

The GIIN intends to launch a second benchmark focused on investments in agriculture. Investors wishing to participate in the Agriculture Design Team must be GIIN members with a track record of impact investing in the sector. They are welcome to reach out to the GIIN Team to apply to participate. Additionally, the GIIN will expand data intake across impact categories via the IRIS+ System in due time.

To get started, please claim your IRIS+ List profile here. You can then contribute data by downloading the financial inclusion impact performance benchmark data intake form here. The intake tool also offers information on the data privacy terms and conditions associated with submitting your data.