NYU Series on Impact Investing: Measuring Impact
As part of the response to growing interest in impact investing on university campuses, NYU has organized a four part speaker series on the subject. The second event in the series, Measuring Impact, featured four panelists whose work is intrinsically tied to social and/or environmental metrics and the measurement of impact, including The Rockefeller Foundation's own Justina Lai. After describing the Foundation's efforts to help build this critical industry infrastructure through the Impact Investing initiative, she discussed how the Foundation, through its work on Program Related Investments (PRIs), uses IRIS and GIIRS as an other impact investor might use these important tools:
"Upfront due diligence is critical. The Rockefeller Foundation will always, given who we are, do a lot of social due diligence upfront. But the goal of something like GIIRS is that eventually, for those who may not have the capacity or the resources to conduct the social due diligence themselves, they will have an easy way to select the type of impact that they’d like to have and choose the funds or companies that meet that criteria.
It’s an opportunity to have a conversation with an investee about the type of impact that they’re trying to achieve and to make sure that they know how to articulate that impact.
"We also look at setting targets upfront. It’s something we ask all of our investees. It’s an opportunity to have a conversation with an investee about the type of impact that they’re trying to achieve and to make sure that they know how to articulate that impact. So we set targets upfront, and sometimes there are carrots and/or sticks involved in achieving those targets. But at a minimum those targets allow us, throughout the post-deal process and the monitoring process, to have a conversation with investees about why they are or are not achieving the targets that were set out. It’s meant to be pragmatic; it’s not meant to be overly onerous. All of our investees are IRIS compliant and, when applicable, GIIRS rated. The hope is that if these become industry standards it becomes even less of an onerous reporting burden on the managers and the investees in the end."
Moderated by Steve Godeke, Adjunct Professor of Finance at NYU's Stern School of Business, the panel's other participants included Mark Berryman of Deutsche Bank's Global Social Investments, Kelly McCarthy of the GIIN, and Flory Wilson of B Lab. The next event in the series will address regulatory issues related to impact investing and is scheduled to take place April 9th.