Impact LPs issue call for quality reporting

A group of seven investors with an interest in impact investing has urged GPs to deliver complete and clear impact reporting, in line with that espoused by consulting firm BlueMark.

“Our ability to interpret and draw conclusions from the impact reports we receive today is hindered by the significant variability in the content and quality of these reports,” the investors wrote in a joint statement.

The signatories to the letter comprise a diverse group of both mainstream and specialist allocators: Bank of America, Big Society Capital, Brightlight, Caprock, Hall Capital, Jordan Park and Stepstone Group.

The collective is urging managers to report in line with the “key elements” of reporting outlined in BlueMark’s 2022 Raising the Bar report, available here. BlueMark provides third party assessments of investors’ approaches to impact investing. Each of the signatories fed into the BlueMark report though an informal working group.

“We expect the impact performance reports we receive to abide by the overarching elements of Completeness – providing the full balance of relevant information needed to understand impact results and risks – and Clarity –presenting impact information in a manner that is digestible and that facilitates interpretation,” the investors wrote.

The open letter draws particular attention to the following facets of reporting:

• Well-defined objectives and expectations: “A quality impact report is explicit about the fund’s intent and impact objectives, including clarity on investor contribution and expected results.”
• Relevant metrics: “A quality impact report includes quantitative metrics that are standardised wherever possible and that link to the articulated impact objectives.”
• Relative performance results: “A quality impact report provides information that allows the reader to effectively interpret and contextualise measures of progress and performance against targets or expectations and against external benchmarks, as available.”
• Integrated stakeholder perspectives: “A quality impact report identifies affected stakeholders and incorporates their experiences and voices to the extent possible.”
• Transparency about risks and lessons learned: “A quality impact report is forthcoming about potential impact risks, failures, and lessons learned.”