Society

This handbook assists impact investors with integrating their impact considerations into their investment practices. It provides practical strategies, tools and case studies to help investors align their financial goals with positive social and environmental outcomes. The handbook covers various aspects of impact investing, including impact measurement, due diligence, portfolio management, and stakeholder engagement.

Use this resource for the following Actions of Impact Management:

• Implement: Execute the strategies outlined in the handbook to integrate impact considerations into investment processes and decision-making. This involves incorporating impact metrics and assessment methodologies into investment analysis, due diligence and portfolio management practices.

The Harmonized Indicators for Private Sector Operations (HIPSO) are a set of standardised indicators for development finance institutions (DFIs). They provide a common framework for measuring and reporting on the development impact of private sector investments and projects, covering areas such as job creation, environmental sustainability, social inclusion and economic growth.

Use this resource for the following Actions of Impact Management:

• Measure, assess and value: Select from a catalogue of metrics specifically designed for DFIs.

The Methodology for Comparing and Assessing Impact provides an analytical framework to compare impact performance, with a specific focus on variance and the extent of the change required to enable meaningful contribution toward impact.

Use this resource for the following Actions of Impact Management:

• Monitor, learn and adapt: Determine to what extent an investment contributes meaningfully to social or environmental progress.

CDP’s Disclosure System is a tool for investors, companies, cities, states and regions to manage their environmental impacts. It enables these organisations to make their environmental impacts transparent, to understand how to reduce their negative impacts and to progress towards environmental stewardship.

Use this resource for the following Actions of Impact Management:

• Communicate: Report to all stakeholders on climate change, forests and water security, based on the organisation’s governance and policy, risks and opportunity management, environmental targets, and strategy and scenario analysis. Responses receive a grade from A-D based on the organisation’s disclosed performance.

The SDG Action Manager is a digital tool designed to help organisations measure their impact across various sustainability areas, set goals aligned with the SDGs, and track progress over time. The questionnaire, which draws from B Lab’s B Impact Assessment and the UN Global Compact’s 10 Principles, enables organisations to collect performance information on the SDGs that are most relevant to manage, based on its size, sector and geography. It was developed through research and public consultation and so provides an evidence-based starting point for identifying sustainability topics to measure.

Use this resource for the following Actions of Impact Management:

• Governance: Prioritise governance mechanisms that address the organisation’s key sustainability risks and enhance its resilience against potential challenges.
• Identify: Understand the most relevant SDGs to manage based on the organisation’s size, sector, and geography.
• Measure, assess and value: Obtain a set of metrics.
• Set targets and plan: Set specific, measurable, achievable, relevant, and time-bound (SMART) targets related to sustainable development. Organisations can align their targets with the specific indicators and targets outlined in the SDGs.

The GIIN Operating Principles for Impact Management provide a framework for investors and fund managers to manage and measure their impact. The principles outline best practices for impact management across the investment lifecycle, from strategy development to implementation, monitoring and reporting.

This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.

Guidance on constructing due diligence questions based on the investor’s impact goals.

Use this resource to:

• Implement: Integrate impact measurement and management into the due diligence process to aid in assessing and managing impact risk.

Guidance on designing impact measurement systems for impact investments selection.

Use this resource to:

• Measure, assess and value: Design an impact measurement system for impact investments.

The Investment Classification is a framework for investors to classify the types of impact occuring in their portfolios. It uses “impact classes” to classify an investment – or portfolio of investments – based on the impact of underlying assets (A, B or C) and the investor’s own contribution.

Use this resource for the following Actions of Impact Management:

• Implement: Connect high-level intentions – which are what most enterprises and investors start with – to the more granular dimensions of impact and data categories, as a way to help to measure and manage impact.

Tools for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Financial Services Disclosure System allows for a baseline assessment of climate-related risks, opportunities and impacts in financing portfolios; and of how banks, asset owners, asset managers and insurance companies are preparing for the net-zero carbon transition.

Use this resource to:

• Identify: Understand the relevant climate change, forests and water security impacts to measure, based on the organization’s size, sector, and geography.
• Measure, assess and value: Track change in performance over time. Each question in the questionnaire is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
• Communicate: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
• Benchmarking and rating: Benchmark environmental performance against industry peers and receive feedback on progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.