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Global Impact Investing Network publishes standards guide

Wednesday, April 03, 2019
Opalesque Industry Update - The Global Impact Investing Network (GIIN), today launches its Core Characteristics of Impact Investing, four tenets that define the growing space of impact investing and will provide financial markets with greater clarity on what constitutes credible impact investing practice.

The Core Characteristics, which have been developed with input from leaders across the impact investing industry, will help investors understand the essential elements of impact investing, define the credibility of their practices, and consider the quality of the practices of potential investment partners.

"We are launching these Core Characteristics at a critical time in impact investing; the next couple of years will either see it remain on the fringe of the financial markets or press forward into the mainstream," said Amit Bouri, CEO and Co-founder of the GIIN. "To tackle issues on the scale of the Sustainable Development Goals and global climate targets, we must think much bigger and engage a much broader set of investors. Scale is essential. But it must be scale with integrity, to ensure we are achieving impact at scale, not just capital at scale. The Core Characteristics provide the greatest clarity to date on the elements that define impact investing, so investors entering the market will know exactly what to strive towards."

In addition to the Core Characteristics, the GIIN has recently released research on the estimated market size of impact investing. According to the GIIN's Sizing the Impact Investing Market report, the impact investing market size sits at an estimated $502 billion and is rapidly growing.

The central aim of the Core Characteristics is to provide clear reference points and practical actions to establish the baseline expectations for impact investing. "Our priority is to set appropriate expectations and define practices in a way that is useful to an investor building or deepening an impact investing portfolio, to support greater participation from both new and experienced impact investors," said Sapna Shah, GIIN Director of Strategy. "The current impact investing market is estimated to be $502 billion, which means trillions of dollars in the capital markets are still sitting on the sidelines, that could be put to work for people and the planet."

The Core Characteristics of Impact Investing include:

  • Intentionality: Impact investing actively sets out to positively contribute to social or environmental solutions by establishing clear impact objectives and thorough strategies to achieve these goals ahead of execution. This intentionality is at the heart of what differentiates impact investing from other complementary practices that focus on avoiding harm or mitigating risk.

  • Evidence-Based Investment Design: Impact investing utilizes evidence and impact data in the design of the impact strategies. Empirical data and research from finance and other industries and disciplines, including social and environmental sciences, provide the basis and support to establish impact objectives and validate results.

  • Impact Management: Impact investing requires commitment to impact measurement and management of an investment towards meeting intended objectives and delivering impact. This means using feedback loops whenever possible, to increase positive impacts over the life of the investment, and decrease risks or unintended negative consequences.

  • Contribution to Industry Growth: Impact investing necessitates a practice that is grounded in shared conventions and standards for describing impact goals, strategies, and performance. Impact investors share non-proprietary and non-private positive and negative learnings, evidence, and data, so others can benefit from their experience.

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