The GIIN’s State of Impact Investment Report

As impact performance becomes a powerful differentiator and a meaningful new dimension of overall performance for all types of investing, understanding the current trends in the impact investing market becomes crucial to take part in this new type of race within the investment marketplace. 

With its latest Impact Measurement and Management (IMM) Survey  published in January 2020, the GIIN  provides a comprehensive overview of the current impact investing market .

The report take a look into how investors describe their objectives, motivations and strategies for understanding and improving their impact, and the processes for holding themselves and their investees accountable, along with the other elements of their IMM practices. 

Findings of the report reflect the growing sophistication and maturation of IMM, the integration of IMM into investment processes and the rising focus on impact results. 

Key Findings

1. While impact investors pursue diverse impact objectives, they universally agree on the importance of measuring and managing impact results. 

• The most commonly targeted impact themes or sectors include employment (71%), agriculture (63%), and financial services (62%).

2. Across the market, IMM practices have grown increasingly sophisticated as investors shift from building consensus for IMM to strengthening its integration within investment processes. 

• IMM responsibilities are allocated to investment teams (68%), to staff dedicated to IMM (50%), and to senior leadership (39%). 
• IMM is integrated into the investment process itself. Impact data is considered across each stage; most commonly during due diligence (81%), investment screening (77%), and identifying the social or environmental needs to address through investment (75%).

3. As the market grows and matures, impact investors increasingly demand insight into impact performance. 

• Key challenges of impact investing are cited as follows; a lack of transparency on impact performance (89%), the inability to compare impact results with market performance (84%), collecting quality data (92%), aggregating, analysing, or interpreting data (74%),
• Investors demanding resources; impact benchmarks (92%), pooled impact data (86%), case studies on best practices (86%), tools to strengthen impact screening (83%).

4. Impact measurement and management incurs some costs, but it also generates financial benefits.

• On average, impact investors spend an estimated 12% of their organisation’s total budget on IMM-related activities,
• Respondents use impact data directly related to an organisations’ financial strength, such as communicating results to stakeholders (89%) and assessing risk factors (45%), to strengthening IMM processes and improving impact results by identifying or refining metrics (69%), setting or revising impact goals (65%), and strengthening data-collection processes (62%). 

Summarised by Bahar Yay Celik, Analyst at INREV’s Professional Standards Team