In brief: An LP develops its own impact ‘benchmarking’ system

The asset owner sees a lack of social impact frameworks in the industry, said one of its staff at PEI Group’s Women In Private Markets Summit: North America this week.

Many impact investors are awaiting the development of benchmarks to measure their impact. But one asset owner is taking matters into its own hands with a benchmarking exercise conducted in-house. As well as collecting outcomes data from companies in its social impact portfolio, the organisation has been asking other companies in its portfolio companies’ industries and sectors for similar data to draw comparisons, according to one of the organisation’s investors. The investor was speaking at PEI Group’s Women In Private Markets Summit: North America this week, which was conducted under Chatham House rule – meaning speakers cannot be identified.

“We found that there were definitely opportunities for us to improve the impact of [the portfolio], to evolve it,” the investor said. The organisation has taken these steps because it sees a lack of impact frameworks for social impact themes in the industry, according to the speaker, which presents a challenge for the organisation’s deployment and management of its impact allocation. “You need good metrics and some sort of framework that [investors such as ourselves] are comfortable with and can feel validated by to give people the confidence to deploy their dollars,” the investor said.

A handful of independent industry advisers and networks, such as the Global Impact Investing Network, are developing benchmarks for various impact themes and objectives.