A newly available methodology allows investors to compare and assess impact investments.
Released Wednesday by the Global Impact Investing Network, the Compass methodology offers investors insight into three critical impact performance figures: scale, pace and efficiency. It also makes it possible to compare impact results.
The idea is to standardize the components and process of impact performance analysis at the aggregate investment, fund or portfolio level.
Officials with the GIIN released an initial analytic methodology in November 2020, then offered it for public comment. More than 150 organizations provided feedback that was incorporated into the final version.
The methodology is aimed at making progress toward impact benchmarks, ratings, and other tools that could help develop impact investing more broadly. The introduction to Compass said that despite growing demand for impact investing, "investors remain woefully under equipped to address impact in decision-making with commensurate rigor and consistency to financial returns."