Impact investors seeking to measure the performance of their investments will soon have new tools to do just that, thanks to Impact Lab.
The new industry initiative of the Global Impact Investing Network will develop benchmarks and other prototype analytical tools in collaboration with practitioners.
The goal is to support impact performance comparisons among peers and across the market, a spokeswoman said.
The worldwide impact investing market size is $1.16 trillion, according to the GIIN, whose co-founder and CEO Amit Bouri thinks the Impact Lab "will take impact investing to a new level of sophistication and push the boundaries of what is possible," he said in a news release.
Impact Lab is being launched with initial funding of $4.5 million from EQT Foundation, EQT's in-house philanthropic arm that invests in early stage, impact startups; the Visa Foundation; and Temasek, the Singapore government investment firm with S$403 billion ($283 billion) in assets.
The initiative wants to enable investors to more efficiently allocate capital towards social and environmental solutions, and to make sure that investment capital is directed to the most effective solutions, Mr. Bouri said. Impact Lab will build on the GIIN's impact measurement and management expertise, and the first effort will be thematic benchmarks.
Once benchmarks are developed, they will be available in current tools, such as the GIIN's IRIS+ system for measuring, managing and optimizing impact and the COMPASS methodology for comparing and assessing impact performance.
"At a time when the global community is facing a multitude of challenges — from poverty and inequity to economic disruptions and the climate crisis — the Impact Lab aims to open new frontiers in impact performance," the GIIN statement said.
