Impact investing will ‘inevitably’ be regulated, says Blue Earth

Impact investment measuring and monitoring will, like ESG, become a regulated exercise, according to Marc Williams, head of climate impact, Blue Earth Capital.

“The broader ESG space is on the whole more evolved and now shifting towards a more highly regulated environment that’s bringing more consistency and transparency to the wider market,” said Williams. “The impact sector will inevitably head in the same direction, and in the meantime it’s up to us working in the impact space to be transparent and accountable, embrace and promote voluntary initiatives and frameworks already available, and set a high bar for ourselves.”

Regulation around ESG varies significantly from region to region and current practice for measurement and reporting comprises a combination of voluntary standards and regulatory disclosures. Measuring investment impact is still a voluntary exercise, with frameworks such as the Operating Principles for Impact Management and GIIN’s IRIS+ providing guidance.

Williams’ comments were contained in Blue Earth’s annual impact report.

Elsewhere in the report:

• Blue Earth was among LPs in Quona Capital‘s third fund. It committed $18 million to Quona Accion Inclusion Fund III, which held a final close on $332 million in 2022. Blue Earth is a direct investor as well as fund investor; the report contains a list of fund commitments and direct investments.
• Forty-five percent of the firm’s capital is invested in private credit, with 33 percent in funds and 22 percent in direct private equity.
• Its largest impact theme is financial inclusion: 33 percent of its investments are in this area.
• The firm grew its headcount from 27 to 40 during 2022.