As the field of impact investing grows - a study done by J.P. Morgan-Rockefeller Foundation predicts that by 2020, it will be a $400 billion market - it has become increasingly vital to measure investment performance. Metrics play a crucial role in separating good companies from good marketing strategies. Impact metrics allow stakeholders, management, and investors to judge performance and make sound decisions in the interest of social and environmental impact as well as financial returns.
There are three powerful tools for measuring impact in investing:
IRIS - a catalog of generally-accepted performance metrics to measure and manage returns on investments. Investors identify goals, select metrics which are relevant to their goals, and measure performance based on the specified metrics.
PULSE - a portfolio management tool, created by Application Experts (App-X). It is available to clients, and comes with pre-set IRIS metrics.
GIIRS - an impact ratings tool and analytics platform. Investors use GIIRS to evaluate companies and assess funds on their respective performances.
A Critical Overview of Concepts and Practice
Subject paper of the Impact Measurement Working Group
IRIS, PULSE, and GIIRS may sound like alphabet soup, but a growing and dynamic industry needs all three measurement tools.