Whether new to impact investing, an experienced impact investor, or part of the growing number of companies addressing global issues, the IRIS+ system and the resources offered through this site have been developed to help all impact investing stakeholders integrate impact considerations into decision making.
Impact is a change in an important positive or negative outcome for people or the planet. Impact can be defined, described, and measured through five dimensions. For more information see IRIS+ and the 5 dimensions of impact.
Source: Impact Management Project
Impact measurement and management (IMM) is integral to making effective impact investments. It includes identifying and considering the positive and negative effects one’s investment approaches have on people and the planet, and then figuring out ways to mitigate the negative and maximize the positive in alignment with one’s goals. Impact measurement and management is iterative by nature. Consider these four distinct actions to get started:
Set goals & expectations: Goals should consider the effects an investment has on people and/or the planet and balance investor expectations for risk, return, liquidity and impact.
Define strategies: IRIS+ includes commonly deployed Strategic Goals that are backed by best practices and evidence. Select the Strategic Goals that are most relevant to your impact investment activities.
There are other pathways to achieving impact goals and meeting expectations. Consider what pathways make the most sense for your portfolio, investment expertise, or client demand.
Select metrics & set targets: IRIS+ Core Metrics Sets are the evidence and best-practice-based sets of IRIS metrics used to assess the effects of any investment or enterprise across the five dimensions of impact.
Impact metrics should ultimately deliver investment decision information, help you learn and pivot when necessary, and strengthen the performance of your portfolio and investment strategy.
Measure, track, use the data, and report: IMM is more than counting metrics. It means considering information about risks, returns, and impact to learn, adjust, and improve investment decision-making. A regular cadence of analysis and review is necessary to conduct high quality IMM.
Investors use IRIS+ to measure and manage the impact of an investment or a portfolio of investments in a consistent way. Use of IRIS+ data in investment management processes allows investors to account for the positive and negative effects of their investments and in doing so minimize negative effects and optimize positive effects. Investors use IRIS+ to generate data for use within at any stage in this process, from screening deals, to underwriting, to conducting due diligence, and assessing performance. IRIS+ data can also be used to compare performance between similar investment strategies, within similar Impact Categories and Themes or Sustainable Development Goals (SDGs).
Companies use the IRIS+ system to identify, measure and manage social and environmental impact and report their impact to investors in a consistent and standard way. The metrics contained in the IRIS+ system align with the Global Reporting Initiative (GRI) Standards — the most widely used company reporting standard — alongside 50+ other frameworks, standards, methodology, and assessment tools.