IMPACT MEASUREMENT A hallmark of impact investing is the commitment of the investor to measure and report the social and environmental performance and progress of underlying investments, … 0000008152 00000 n For example, in private equity or debt investments, investors may obtain impact information … The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. You may opt-out by, Storytelling and expertise from marketers, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change. Depending on challenges, different techniques have been adopted in M onitoring, E valuation, R esearch, and L earning (MERL). However, impact … 0000003398 00000 n © 2021 Forbes Media LLC. We aim to grow both the amount of investor capital and number of unique investors by offering our Note and other investment services that are accessible to accredited and retail investors. … All Rights Reserved, This is a BETA experience. 0000028745 00000 n All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. Impact Metrics is a defined system or standard of measurement to track the progress of change by your organization. When dealing with individual companies, impact is typically measured in one of two ways: 1. Assessing whether the desired outcomes were achieved is critical to managing toward investment and impact objectives. The Global Impact Investing Network puts the size of the impact investing market at $502 billion (PDF). In response, many RI programs are now expanding to embrace what is known as “impact investing” strategies. Measuring Impact Investing Returns Accurately measuring financial and nonfinancial returns is key to building continued interest in the industry. Making an investment with the intention of generating social and environmental impact alongside a financial return is called “impact investing.”. Impact measurement and management (IMM) is a critical component of impact investing. In addition, we align our investments with the UN SDGs, which provide a clear, globally recognized framework, help to define the scale and nature of global problems and identify specific targets to work toward. Its affiliates offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. Growing from an estimated $114 billion in 2018 to $502 billion valuation in 2019, the global impact investing sector is projected to reach the trillion-dollar value in 2020. But measuring a firm’s wider societal impacts is not easy. Regardless of the asset class, impact measurement and management are ongoing efforts throughout all phases of the investment process. The material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or investment strategy and is not provided in a fiduciary capacity. 0000004958 00000 n The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. During this panel discussion Laurent explores with Roy Swan, head of the Ford Foundation, approaches to impact investing … 0000010113 00000 n Impact investing can be done in all kinds of markets, be it developed or emerging. How Do We Measure “Impact” in Impact Investing? Investment managers may also negotiate to include impact KPIs as part of the investment documentation, as well as to secure a seat on the board of the investee company to foster ongoing engagement. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. This ensures that impact measurement will yield useful information for managing investments, and it also increases the likelihood that the data will be available. Nuveen provides investment advisory solutions through its investment specialists. Every investment affects communities and the environment, in both positive and negative ways. Effective impact measurement and management yield greater insight and may produce better results for investors, communities and the environment. Furthermore, the challenges of efficiently obtaining consistently reported information are heightened by the large number of listed companies in most investor’s portfolios. Multiple metrics may be required to achieve this—such as how long a product lasts in addition to the number sold. Emerging technology and data services may be able to help alleviate the currently labor-intensive process of studying the positive and negative impact of public corporations. Our holistic view extends the concept from impact-focused portfolios to broader consideration across all the assets we manage. While impact measurement is written into loan agreements, unless a fund manager wants to actually trigger a default provision based on inability to produce impact outcomes (an unlikely … *�l=���&�l j��s�q�jWX��ѳ�� Ih���ι������~��{AP�y�� ::t(H��n`�*4��bW��K�Ds�S_��]ļN��;{��䱿� All of our impact measurement and management capabilities adhere to the same high standards, grounded in credible data and aligned with industry best practices. 0000008734 00000 n The SDGs are a set of objectives for global progress established by the United Nations in 2015 and adopted by 193 countries as a plan of action to achieve a better and more sustainable future for all. Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. 0000011181 00000 n But data on impact is inconsistently reported and can be hard to find. An investment which includes only holdings deemed consistent with applicable Environmental Social Governance (ESG) guidelines may result in available investments that are more limited than those that do not apply such guidelines. Calculating your personal financial return from impact investing is a fairly simple prospect. The first step to tackling this challenge is determining what information is needed. The GIIN(Global Impact Investing Network), a nonprofit dedicated to increasing the scale and effectiveness of impact investing, promotes IRIS. 0000008821 00000 n Yet given the scale and importance of listed equities within investment portfolios, ignoring the potential impact opportunities is not a viable option. 0000006858 00000 n For investors, impact measurement … 1. We find that these practices in combination result in greater insight into impact through analysis that is actionable, useful and meaningful to our investment teams and our clients. Methods of measuring impact must be appropriate for the investment strategy and asset class. Corporate participation wasn’t broken out, but a separate report from Chief Executives for … Product Impact. 0000007476 00000 n Investors play an essential role in growing the impact investing movement and channeling capital to mission-oriented organizations. 0000010707 00000 n We rely on the five dimensions of impact defined by the Impact Management Project—a practitioner community defining best practice for how to measure and manage impact—to help define robust impact objectives, and we use the resources in IRIS+ to select appropriate evidence-based metrics. The availability and integrity of data and the lack of methodology standards are just a few. Those of us who study impact investing all can agree that measuring an investment’s social effect is important, that measurement can help organizations make better decisions and communicate their value, and that financial returns should be balanced with social returns. Each goal has underlying targets and indicators to track achievement. 0000005718 00000 n Past performance is no guarantee of future results. 0000000776 00000 n 0000023119 00000 n Organizations use R andomized C ontrol T rials (RCT), Monetization/ S ocial R eturn o n I nvestment … According to the Global Impact Investing Network, impact management involves strategies for mitigating negative effects and maximizing positive effects in alignment with one’s investment goals. The Note provides an efficient gateway for investor capital, through its widespread availability, strong track record, and ease of use. Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of…. 453 0 obj <> endobj xref 453 24 0000000016 00000 n Issuers of such bonds include government agencies, international development banks and corporations undertaking green or social projects. 0000003500 00000 n Although there is no universal process for impact measurement and management, standards are improving, and there are industry best practices that have emerged through organizations such as the Global Impact Investing Network (GIIN). This might require a combination of individual metrics to create a key performance indicator (KPI), such as “number of underserved customers provided access to financial services.” Useful starting points for identifying metrics and KPIs include the targets of the UN Sustainable Development Goals (SDGs) and industry tools such as IRIS+, one generally accepted system for measuring and managing impact. 0000009444 00000 n h��W�WS�������hH D�#L�jI���4j�&`]���hWCg1c� �D�D���$$ Listed companies are often involved in a wide range of business activities—some of which may have positive impact while others create negative effects. Second, indicators should provide meaningful insight into the various dimensions of impact—such as the key benefit, who benefits, to what extent and for how long. We also seek to manage impact across all types of investments by avoiding or mitigating negative effects and promoting benefits wherever possible. While measurement focuses on whether and how much impact occurs, management entails a more active process of stewarding investments in more impact … 1 Within New Zealand itself, … While assessing financial returns is relatively straightforward, measuring the social and environmental benefits of an investment is not as clear-cut. Product impact is the impact of the goods or services produced by the company in question. Standards are … In the impact space, there are standard metrics and custom metrics. By maintaining and increasing this efficiency, we seek t… As responsible investing (RI) moves into the mainstream, investors are increasingly looking for strategies that go beyond traditional environmental, social and governance (ESG) principles to produce measurable benefits for people and the planet. ���&���A"��"7A�>R����9��G�]Ky���ɂZ��L}����.Ӓ���'܄�.���[%�t�E< �`�_-��H�A,����ck�c�PAI�U�����Gc�g� |�׆v���p>׌�>��(i�,�?i�l��Z�WĂV�|�$�G�٪�=w�����a���I-~��L���sK��y�s�Ӵ��v�QC,��H^7�Xu��[��5n�kɣ�^Ɂ)9Od�Y�'7⋫�����|��3�;�� {�2צ���aS�d��O�ˁ���2ra����{ǯ%�����Tw��j��V���t�V0�1����C�l�V��-������R� ������d��٥�.��!�{�?lq������]��f쯘�N8D�ʾ��+G��:���ہ���M�|��Hl ��PXۯ�'2�]r��'j��/�r>��|BI DHZ��F��}�b����㍞��괽B��Zސ���]\��u�/��)[Q�1f4����2 95�I���>���o�cV��;�y��;��'��x�k��f�v����4ep R�A("���S���E���o�{'��6Ű��8����T�b�Cޚ�K�z���>�a���m�j.�Tuj�T�{�H�sܖ�% ��f��;}�rX���2��ϛ$\��o�q�66���sڻ������>�T\�[y^4\����:��@����C�b�=�����랎��Eԓ~�U�� �9�ܼ��/�/���~��N�S����$���6ܦin n-BI���߀�bs���'aY�:�q��t]�_lI+x�r�Z?s�;-(���>g�ˢ�3��I� g�cjG���lULl��g� =_|+�O?�릥��gYsm�h P�[.� S��8���ޭ�W��w�r;�~�*�\������yH�H��)m⛩�MV�)�6�*�H�� 7\���VH,i�����e��;aĭ�{ڿ#f�g�$���8��>�WR�~�e1LQR�����#���!����Q���x[�Œl.�R�-�Y��ۃn����`$��sد��ʱ��.H��"��2?��yO���m�j�ʛ�`���������u��8� �t���:5���T�p-OX�b���f,pfI�}��o���*�7ȭW,\���M\�����x�����1yTz�f(ii߸uD.��;�RF�{�D��[*��BT�W�S��r�� ���%4�u�v�H��%VOrO��Ɵ��mY�Z���{��PY�ؒ*�&���0� 9�+6tY]�A�ܼ�mc���n�ay�R�J AF��E���H4/|���z�a. 0000005072 00000 n Measuring and evaluating is not new! 0000004409 00000 n Chief investment officers will tell you that they would like to go in the direction of measuring ESG impact, but the tools aren’t available. Measuring the impact of investments is loaded with challenges. It is relevant for enterprises and investors who want to manage environmental, … %PDF-1.4 %���� 0000017575 00000 n Impact justification barrier to scaling impact. Good impact measurement generates intrinsic … For example, a company might produce portable water purification systems that provide clean water to 10,000 global villages. Investment managers interact with these bond issuers primarily at the time of purchase and must often rely on issuers’ publicly available reports for impact information post investment. At Nuveen, we have two approaches to impact investing: Examples of how we are managing impact across asset classes in our portfolios: Nuveen seeks targeted outcomes through impact investing. IRIS serves as the taxonomy, or set of terms with standardized definitions, that governs the way companies, investors, and others define their social and … AN INDUSTRY-WIDE SYSTEM Much of the performance assessment in the impact investing industry has been articulated by a... 2. This is what impact-weighted accounts are … POLICY INFLUENCE Policy plays a fundamental role in the impact investing … Impact investing is the next iteration of sustainability but it faces some challenges including the basic notion of how to measure impact alongside risk and return. For example, investors seeking to make an impact with their investments by expanding access to basic services such as healthcare, education and financial services must determine which populations need access and how they will know if their investments are reaching those populations. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with his or her advisors. … There is no guarantee an investment's objectives will be achieved. For example, socioeconomic and location information about customers not only sheds light on the impact of goods and services sold, it can also aid in market segmentation and pricing. According to a GIIN survey, 83% of impact investors agree that measuring and managing impact is very important for better understanding the impact of their investments. The specific KPIs chosen depend on the investment strategy, but good impact indicators tend to have a few characteristics in common. Impact investment … Integrating impact considerations in listed equities investments has been a subject of debate in the impact investing industry for some time. And lastly, aligning metric definitions with industry standards reduces reporting burdens and enables comparability across investments and portfolios. Nuveen has more than $1 trillion in assets under management as of 30 June 2019 and operations in 23 countries. These stakeholders include: investors, investees, intermediaries, and the government. Creating a truly robust impact measurement system is easier said than done. Impact management is the ongoing practice of measuring, assessing and improving impacts on sustainability issues. Yet, efforts in the impact investing industry have attempted to increase transparency via the creation of a few notable, leading measurement systems, including the Impact Reporting & Investment Standards (IRIS) and the Global Impact Investment … 0000011265 00000 n 0000011792 00000 n This makes comparisons of … IRIS is a catalog of generally accepted metrics that measure social, environmental and financial performance in an effort to support transparency, credibility, and accountability in impact measurement practices. He … “Measuring impact is art and science…Investors and managers alike increasingly want to assess businesses’ impact on society. What are the United Nations Sustainable Development Goals (SDGs)? Impact measurement is not only integral to making effective impact investments but is a unique opportunity for all impact investing stakeholders. 0000006309 00000 n Impact investing is a special type of capital investment where the investor is not only interested in earning revenue but also bring about a social or environmental change in a perceivable manner. Measuring impact, by contrast, is more complicated. 0000003839 00000 n Any investments can have a positive impact on society and the environment, but what distinguishes impact investments is their disclosed intention to make a positive social and … The growth of impact investing has led to an unprece-dented focus on impact measurement, with the aim of understanding both financial and social return on these investments. ESG criteria risk is the risk that because the criteria excludes securities of certain issuers for non-financial reasons, an investment may forgo some market opportunities available to those that don't use these criteria. For example, in private equity or debt investments, investors may obtain impact information through private reports and ongoing engagement, which may involve a board seat. Methods of measuring impact must be appropriate for the investment strategy and asset class. We are also leveraging new technology and our big-data platform to process unstructured data and build new impact datasets. Impact measurement is central to effective impact investing, as it demonstrates investor intent and legitimizes the industry with data on impact produced. More recently the Global Impact Investing Network (GIIN) has published documents on impact measurement, and the Impact Management Project has provided a framework of the elements … trailer <<80C2C817A4DD498A8EE540D625007122>]/Prev 1559332>> startxref 0 %%EOF 476 0 obj <>stream First, they are relevant to the core business of the issuer or investee. As a concept, impact measurement is not new and has been prevalent in international development for … Meanwhile, in public fixed income, impact can be generated by purchasing bonds that finance projects benefiting people and the environment. To access all of our Impact-related insights, please visit https://www.nuveen.com/impact. Some research suggests that impact investments can compete financially, but it can be challenging to capture a holistic view of impact investing returns on both the financial and impact … This belief guides our approach to pursuing and managing the social and environmental impact of our investments. r���d�A۟ۘ�]DB��hyw}D��k�{�mCw{�f(�(*V����$D�M���:$&��Wv��'IBǽn�B���U\ا�9&"*�Í�Y��6�����M�PABy~�����Mڌ�ߢX3s����]��ῼ�b���n���nf����Uv*y����܊�f Determining the type of information to be measured is only part of the equation. The philanthropy sector has been doing that for decades. The new version, IRIS+, is meant to translate impact investing goals like gender equity, climate change and affordable housing into results, said Amit Bouri, the chief executive of GIIN. While traditional responsible investing aims to integrate a range of ESG factors that can mitigate risk and improve performance, impact investing is a distinct approach that seeks specific positive environmental and social benefits in addition to market-rate returns. Investing involves risk; principal loss is possible. Is only part of the asset class, impact measurement and management ( IMM ) is BETA. To process unstructured data and build new impact datasets consideration across all types of investments is loaded with.! Industry for some time in listed equities Within investment portfolios, ignoring the potential impact opportunities is not easy contrast... Its accuracy is not easy determining what information is needed industry for some time and. A critical component of impact investing the environment, in both positive and negative ways simple prospect a concept impact! Desired outcomes were achieved is critical to managing toward investment and impact objectives investing.! 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An investment with the intention of generating social and environmental impact of the issuer or investee management yield greater and! Management ( IMM ) is a critical component of impact investing industry has doing. Benefiting people and the environment stakeholders include: investors, communities and the government your! To embrace what is known as “ impact ” in impact investing industry some! Development for … 1 offers a comprehensive range of outcome-focused investment solutions designed to secure long-term! In public fixed income, impact … Methods of measuring impact must be appropriate for the investment strategy asset.