What tools and frameworks do social impact investors use? (2024)

The Impact Management Project (IMP) is a global network of practitioners and experts who have developed a set of standards and principles for impact management. The IMP framework helps investors to define, measure, and report on the impact of their investments, using five dimensions: what, who, how much, contribution, and risk. The IMP also provides guidance on how to align impact goals with the United Nations Sustainable Development Goals (SDGs), and how to use impact data to improve performance and accountability.

The IRIS+ System is a tool that helps investors to collect, compare, and report on impact data, using a common language and metrics. The IRIS+ System is based on the IMP framework, and offers a set of core metrics and indicators that are relevant for different sectors, themes, and strategies. The IRIS+ System also allows investors to benchmark their impact performance against industry norms and best practices, and to access resources and insights from the Global Impact Investing Network (GIIN).

The B Impact Assessment (BIA) is a tool that evaluates the social and environmental performance of companies, using a comprehensive and rigorous methodology. The BIA covers five areas: governance, workers, customers, community, and environment. The BIA also generates a score that reflects the company's overall impact, and provides feedback and recommendations for improvement. The BIA is used by certified B Corporations, which are companies that meet the highest standards of social and environmental responsibility, as well as by investors who want to assess the impact potential of their portfolio companies.

The Theory of Change (ToC) is a framework that helps investors to articulate and test the logic and assumptions behind their impact strategy. The ToC describes the problem that the investor wants to address, the solution that they offer, the activities and resources that they employ, the outputs and outcomes that they expect, and the indicators and evidence that they use to measure progress and impact. The ToC also helps investors to identify and mitigate potential negative or unintended consequences of their actions, and to communicate their impact story to stakeholders.

The Impact-Weighted Accounts (IWA) are a framework that aims to integrate the social and environmental impact of companies into their financial statements. The IWA use monetization techniques to assign a monetary value to the positive and negative impacts of companies on society and nature, such as carbon emissions, water use, employee well-being, and customer satisfaction. The IWA then adjust the income statement, balance sheet, and cash flow statement of companies to reflect these impacts, creating a more holistic and transparent picture of their performance.

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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