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NV Colombia: Emerging Tools for Impact Investing
- 2. Emerging Tools for Impact Investing
- 8. My Company Your Company Full Time Employees = Full Time Employees GHG Emissions Reduced = GHG Emissions Reduced
- 9. + Environmental & Social Performance Financial Performance ~Analogous~
- 11. Investment transparency, credibility
- 12. Sector benchmarks, comparability
- 13. Decreased transaction costs, due diligence, etc.
- 14. Standard impact performance metrics
- 15. Lower stakeholder reporting burden
- 21. Performance tracking over time
- 22. Side-by-side investment comparison
- 26. + Environmental & Social Performance Financial Performance ~Analogous~
- 28. Benchmarks, performance tracking
- 29. Portfolio & fund comparison
- 31. Reporting & communications tool
- 35. Preguntas? Entrepreneurship. Environment. Emerging Markets. Brazil. China. Colombia. India. Indonesia. Mexico. United States.
Editor's Notes
- Gracias Kirsty!Buenos Dias! Muchas gracias porhabermeinvitado a supaís! Estaes mi primeravezyestoymuyencantado de estar en Colombia con todosustedes! Mi nombrees Kelly McCarthy yyo soy el "Impact Officer" para New Ventures en Washington DC. Lo sientopor mi español - Todavíaestoypracticando! Por lo tanto, por favor perdónameporhacer mi presentación en Inglés.
- This morning we heard from organizations like ANDE and AVINA about an emerging type of investing called “impact investing.” This morning Stace asked how many of you are entrepreneurs & how many are investors…. I’d like to ask a related question:Can I see a show of hands of how many of you are actively seeking investment to help your business grow? Well, I’d like to share with you some incredible examples of global efforts to build the market infrastructure and three basic tools intended to help more efficiently channel investment towards companies like yours.
- I’m sure many of you recognize this building – it’s the home of the New York Stock Exchange on Wall Street.
- Whether on a good day or a bad day, for more than a century that ticker – and and increasing number of others like it around the world - have been measuring the heartbeat of an increasingly global economy fueled by innovation and entrepreneurship.
- As you all know, this is in large part due to the fact that the Stock Exchange was built on a strong market infrastructure that includes a set of globally recognized financial accounting standards, rating systems, and data analysis tools… when used together they describe the performance of any listed company and help capital flow efficiently and businesses grow.
- So, today, I’d like to talk about global efforts to build the market infrastructure and the three basic but fundamental tools intended to help more efficiently channel capital towards companies like yours: Profitable, commercial enterprises whose products and services also generate positive environmental and social results.
- So, the first tool I’d like to talk about is IRISIRIS is the Impact Reporting Investment Standards
- At it’s very basic; IRIS can be thought of as a Dictionary for defining the social and environmental impacts, and performanceof companies like yours. For example, if I have a company, it helps clarify that when I talk about jobs and you talk about jobs that our definition of jobs is the same. Are we talking about full time jobs? Part time jobs? Seasonal or contract? This difference matters when we are trying to figure out the quality of the job.Likewise, if I say my company has reduced GHG emissions and you say your company has reduced GHG emissions the way we calculate reductions is the same – so we can compare, so our investors can compare, and so we can benchmark our performance in our sector.
- IRIS serves as a foundation for the development of additional market infrastructure. It is one of the first steps toward providing needed transparency and credibility for investors. Another way to think of IRIS is that its an impact investor’s metrics and accounting principles or an IFRS equivalent that streamlines the flow of mission-driven capital between investor and investee.
- So, what does this mean for investors and what does this mean for entrepreneurs?
- Next, I’d like to talk about PULSE.
- PULSE is a Portfolio Data Management System. It is like EXCEL, but on steroids. PULSE uses the IRIS definitions and metrics to create a working profile of each investment in a portfolio.
- In fact, it is increasingly being used by fund and portfolio managers to track, analyze, and report on the performance of their investments and portfolios as a whole.
- So, what exactly does this mean for investors? (bullets) PULSE offers side-by-side comparisons, performance over time, and other analytics. PULSE can be used as an information sharing system for impact fund managers
- The last tool, I’d like to talk about is GIIRS.GIIRS is the Global Impact Investing Rating System.
- GIIRS is an impact rating system that was developed due to increased interest by investors to have a tool that helps further screen existing and potential investments on their environmental and social performance •Uses key metrics from IRIS to build it’s rating•Interfaces with the PULSE system to make the flow of information more efficient
- GIIRS is a rating system, and can be thought of as a powerful external communications tool for both investors about their portfolios as well as companies like yours who want to increase the visibility of their company among investors and other key stakeholders.
- Another way to think of GIIRS is as an investment ratings tool similar to S&P credit risk ratings, except that GIIRS also evaluates the social and environmental impact of companies and funds.
- So, what does THIS tool mean for investors and for entrepreneurs? First, its important to know that GIIRS is a voluntary Impact Rating System for impact funds and companies: •For all users: Rates social, environmental, and financial performance •For funds: Rates performance of entire portfolio and ability to identify high performing companies •For High performing companies: Maximizes potential to attract mission-aligned capital or impact investments
- In summary,These tools were launched in response to a need to build the market infrastructure for a $10s of Billions and growing impact-investing industry – an industry focused on increasing investor’s ability to help capital flow efficiently to businesses like yours so you can grow and continue the amazing work you do every day.