Bain Capital Double Impact, Finance in Motion, LeapFrog Investments, Nuveen Private Equity Global Impact, and Trill Impact have been named the top brands of the BlueMark Practice Leaderboard.
BlueMark, an impact verification specialist, published its third annual report on best practices and trends in impact management featuring data and insights gleaned from the firm’s verifications of investor impact management practices. Impact management refers to the practice of measuring and managing a firm’s environmental and social impact.
BlueMark’s methodology is grounded in the Operating Principles for Impact Management (Impact Principles), a market standard for impact management practices.
The analysis is based on 60 verifications for impact investors managing a combined $160 billion in impact assets under management. This is double the sample size of last year’s edition of Making the Mark, which was based on 30 verifications for investors managing a combined $99 billion in impact assets under management. The larger sample size reflects the growing demand for impact verification and brings additional clarity into trends and challenges across the market.
BlueMark’s analysis also revealed several interesting trends across the impact investing industry:
- Despite growing discussion about impact-linked compensation structures, the practice remains limited. Only 38% of impact management systems explicitly integrate impact considerations into staff incentives, with performance development and review processes identified as the most common method (25% of verified investors).
- Impact investors are aligning around a handful of measurement frameworks. A majority of impact investors (77%) have adopted industry frameworks and/or taxonomies for selecting their impact metrics, with IRIS+ emerging as the most common framework followed by HIPSO and an array of ESG reporting standards
- Investors vary significantly in their establishment of ex-ante impact targets, compromising the market’s ability to gauge success. While 63% of impact investors monitor impact performance against an expectation — such as a baseline KPI or qualitative impact rating — the quality of target-setting practices varies widely
- An increasing number of impact investors are engaging with key stakeholders and actively solicit their input. Less than a third of impact investors (28%) engage with key affected stakeholders and actively solicit their input, an increase of 17 percentage points compared to last year’s research sample.