For Good Measure: Understanding impact metrics for your enterprise
- 1. IRIS Impact Repor1ng & Investment Standards 2011 SOCIAL FINANCE FORUM WEDNESDAY, DECEMBER 14 2011 © Global Impact Inves1ng Network, 2011
- 2. Agenda Introduc,on: Impact Inves,ng and IRIS • IRIS, its purpose, and stakeholders 10 min Using IRIS • Theory of change, processes for selec1ng metrics, sample reports 10 min Workshop: Selec,ng metrics for your organiza,on • Use Case 10 min • Breakout Groups 25 min Impact Repor,ng • Processes, Methodologies, Frameworks & IRIS 5 min 2 © Global Impact Inves1ng Network, 2010
- 3. INTRODUCTION Impact Inves1ng and IRIS: IRIS, its purpose and stakeholders 3 © Global Impact Inves1ng Network, 2010
- 4. The Global Impact Investing Network (GIIN) The GIIN is a not-‐for-‐profit organiza5on dedicated to increasing the scale and effec5veness of impact inves5ng. The GIIN builds cri5cal infrastructure and develops ac5vi5es, educa5on, and research that can increase the scale and effec5veness of impact inves5ng around the world. © Global Impact Inves1ng Network, 2011
- 5. The Impact Reporting and Investment Standards (IRIS) is a common language for de2ining, tracking, and reporting the social and environmental performance of organizations. 5 © Global Impact Inves1ng Network, 2010
- 6. IRIS addresses market fragmenta1on 1 • Lack of consistency and coordina,on in use of metrics and defini,ons 2 • Unclear and insufficient incen,ves for impact repor,ng 3 • Insufficient aggregate data to inform investment decisions and monitor performance Inability to understand the full value of impact investments 6
- 7. IRIS is… My Metrics Your Metrics Full Time Employees = Full Time Employees GHG Emissions Reduced = GHG Emissions Reduced 7
- 8. IRIS is… Financial + Environmental & Social Performance Performance ~Analogous~ 8
- 9. IRIS is a meta-‐standard Examples of Frameworks Leveraged § Interna1onal Financial Repor1ng Standards (IFRS) § U.S. Generally Accepted Accoun1ng Principles (GAAP) Financial Performance § Microfinance Informa1on Exchange (MIX) § Community Development Finance Data Project (CDP) § Interna1onal Labour Organiza1on (ILO) § Organisa1on for Economic and Coopera1on and Opera,onal Impact Development (OECD) § Global Repor1ng Ini1a1ve (GRI) § B Lab § Cer1fica1on schemes (FLO, FSC, SAI, etc) Product Impact § Sector-‐specific protocols (SPTF, NCIF, etc) § Proprietary systems (IFC, WRI, etc) 9 © Global Impact Inves1ng Network, 2010
- 10. IRIS is not… 10
- 11. IRIS is for… • Increased transparency & credibility Investors in Funds • Applicability across geography, sector, and at the fund level • Standardized third-‐party performance metrics Direct Investors • Peer-‐based benchmarks & comparability • Streamlined repor1ng • Simplified, targeted impact repor1ng Intermediaries guidance for clients • Increased ability to assess aggregated impacts • Standardized impact performance metrics Enterprises • Streamlined repor1ng • Performance benchmarks 11 © Global Impact Inves1ng Network 2011
- 12. Who’s using IRIS Es,mated Users: • 100+ Funds The IRIS World as • 1,900+ MFIs (*MIX alignment) We Know It • 3,000+ Companies Alignment, Mapping, and Harmoniza,on Examples: FIELD/MicroTest 12
- 13. USING IRIS Processes for selec1ng metrics, sample reports 13 © Global Impact Inves1ng Network, 2010
- 14. Genera1ng Social/Environmental Impact Diverse Impact Objec,ves Across Mul,ple Sectors Across Mul,ple Models (Product/Service & Opera,ons) n Agriculture n Health n High quality job crea1on n Financial n Energy services n U1lizing BOP+ suppliers n Water n Housing n Increasing energy efficiency n Other n Educa1on n Facilita1ng asset accumula1on n Improving health outcomes © Global Impact Inves1ng Network 2011
- 15. An impact measurement pathway is a basic set of steps for planning, implementing, communicating, monitoring, and improving social and environmental performance.
- 16. Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (5) CODIFY (6) COLLECT & Theory of Stakeholder Outputs, Metrics & M&E MANAGE Change Expecta,ons Outcomes & Indicators Processes, Performance (7) VALIDATE Impacts Frameworks Data Performance Data (8) ANALYZE Performance Data (9) REPORT (11)IMPROVE Performance Performance Data to Stakeholders (10) SOLICIT Stakeholder Feedback
- 17. 1 Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (5) CODIFY (6) COLLECT & Theory of Stakeholder Outputs, Metrics & M&E MANAGE Change Expecta,ons Outcomes & Indicators Processes, Performance (7) VALIDATE Impacts Frameworks Data Performance Data (8) ANALYZE Performance Data A Theory of Change is a strategy or blueprint for achieving long-‐term goals. It iden5fies the precondi5ons, pathways and interven5ons (9) REPORT (11)IMPROVE Performance necessary for realizing success. Performance Data to Stakeholders (10) SOLICIT Stakeholder Feedback
- 18. 1 Define Theory of Change Example Global poverty and environmental issues are inextricably linked – it is the most impoverished people that will suffer the worst consequences of Principles climate change and water and resource scarcity. Unless we pursue harmonious solu,ons for both, we will succeed at neither. To combat poverty for both people and planet while working toward the long-‐term conserva1on and sustainable use of natural resources by employing Hypothesis market-‐driven solu,ons that focus on suppor,ng environmentally and socially responsible small and growing businesses (SGBs) in emerging markets – the engines of innova1on. (1) Develop Local “Ecosystems” of Support Strategy (2) Engage Impact Investors (3) Build a Global Network
- 19. 2 Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (5) CODIFY (6) COLLECT & Theory of Stakeholder Outputs, Metrics & M&E MANAGE Change Expecta,ons Outcomes & Indicators Processes, Performance (7) VALIDATE Impacts Frameworks Data Performance Data (8) ANALYZE Stakeholders are persons, groups, Performance Data organiza5ons, systems , or the natural environment who affect or (9) REPORT can be affected by an (11)IMPROVE Performance Performance Data to organiza5on's ac5ons. (10) SOLICIT Stakeholders Stakeholder Feedback
- 20. 2 Align Stakeholder Expecta1ons Example Issues (1) Climate change (2) Water quality & quan1ty Environment (3) Biodiversity loss (4) Natural resource pressure (5) Pollu1on & waste Issues (1) Access to basic services (water, food, energy, Impoverished sanita1on, housing, health, educa1on) (2) Access to employment, fair working condi1ons, and fair wages Issues (1) Access to entrepreneurial support SGBs (2) Access to finance (3) Access to markets (4) Technology transfer
- 21. 3 Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (5) CODIFY (6) COLLECT & Theory of Stakeholder Outputs, Metrics & M&E MANAGE Change Expecta,ons Outcomes & Indicators Processes, Performance (7) VALIDATE Impacts Frameworks Data Performance Data Outputs: prac5ces and products (and (8) ANALYZE byproducts) that a company itself can Performance measure directly -‐ generally intended to serve Data as proxies for impact. Outcomes: changes or shiOs in behaviors or (9) REPORT social paradigms that are levers for impact. (11)IMPROVE Performance Impacts: part of the total result that occurred Performance Data to Stakeholders due to a company’s ac5vity, above and (10) SOLICIT beyond what would have happened anyway. Stakeholder Feedback
- 22. 3 Map Outputs à Outcomes à Impacts Example Issue: Health > Malaria Impacts Incidents of malaria in target region have (change we seek) decreased, thus the health of the target popula1on is improved Issue: Health > Malaria Outcomes Bed nets are being used by target popula1on for (behavioral or social shiO) intended reason Issue: Health > Malaria Outputs Bed nets are distributed at scale to impoverished (product, service or prac5ce) popula1on in target region
- 23. 4 Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (5) CODIFY (6) COLLECT & Theory of Stakeholder Outputs, Metrics & M&E MANAGE Change Expecta,ons Outcomes & Indicators Processes, Performance (7) VALIDATE Impacts Frameworks Data Performance Data Metrics and indicators mark the difference between something that’s easy to count but (8) ANALYZE unrelated to actual impact, and something Performance that’s both countable and is in fact a valid Data proxy for impact. It is possible to gauge this to a reasonable degree of credibility via the (9) REPORT (11)IMPROVE Performance proxy of outputs that have been determined Performance Data to by researchers to be indicators of impact, and Stakeholders (10) SOLICIT which can be easily measured during the Stakeholder course of regular opera5ons. Feedback
- 24. 4 IRIS Structure: Choose Metrics & Indicators Example • Qualita,ve and quan,ta,ve indicators in five taxonomy Cross-‐sector indicators that are useful sec1ons. to organiza1ons in mul1ple sectors, • Report indicators for an and “sector-‐specific” indicators for organiza1on or a par1cular organiza1ons whose ac1vi1es impact a product. given sector.
- 25. 5 Impact Measurement Pathway Phase 1: Planning Phase 2: Implemen1ng (1) DEFINE (2) ALIGN (3) MAP (4) CHOOSE (6) COLLECT & (5) CODIFY Theory of Stakeholder Outputs, Metrics & MANAGE Change Expecta,ons Indicators Processes, Outcomes & Performance (7) VALIDATE Frameworks Impacts Data Performance Data (8) ANALYZE Frameworks, Approaches, and Performance Methodologies are both internal prac5ces Data and named, documented processes that are used to assess either the actual social and/or (9) REPORT (11)IMPROVE Performance environmental impact of an organiza5on’s Performance Data to ac5vi5es or the indicators of that impact. Stakeholders (10) SOLICIT Stakeholder Feedback
- 26. 5 Codify M&E Processes, Frameworks Example Social Return on Investment Valua,ons (SROI) Assessments Internal Systems iPAL
- 27. IRIS structure IRIS Framework • Qualita,ve and quan,ta,ve Cross-‐sector indicators that are useful to indicators in five taxonomy sec1ons. organiza1ons in mul1ple sectors, and • Report indicators for an organiza1on “sector-‐specific” indicators for or a par1cular product. organiza1ons whose ac1vi1es impact a given sector. 27
- 28. Overview of IRIS Framework
- 29. IRIS Standards: Organiza1onal Informa1on
- 30. IRIS Standards: Impact Objec1ves
- 31. IRIS Standards: Product Descrip1on
- 32. IRIS Standards: Opera1onal Impact
- 33. IRIS Standards: Opera1onal Impact
- 34. IRIS Standards: Product Impact
- 35. IRIS standards: Measuring what malers
- 36. Sample Impact Report: Smallholder Suppliers h[p://iris.thegiin.org/report/free-‐bee-‐honey
- 37. Contacts: Anshula Chowdhury, Social Asset Measurements anshula@socialassets.org Karim Harji, Venture Deli karim@venturedeli.com Tessa Hebb, Carleton Centre for Community Innovation (C3i) thebb@attglobal.net Kelly McCarthy, IRIS, Global Impact Investing Network (GIIN) kmccarthy@thegiin.org Joyce Sou, MaRS Centre for Impact Investing jsou@marsdd.com © Global Impact Inves1ng Network, 2010
- 38. Youth Music Org. Case Study Walk through
- 39. Case Study: Steps - Basic Case Facts: “Youth-Music Org” - Basic Evaluation Facts: “Youth-Music Org” - Overview of Impact Mapping - “Youth-Music Org” Impact Mapping Example Pg 39
- 40. The Facts - YMO is a non-profit funded by the government - Music programs for youth aged 16-24 - Free hip-hop music class runs twice a week by paid staff and volunteers - YMO expects the participants will gain technical art skills which increase confidence, school engagement and increased peer support networks which provide access to employment Pg 40
- 41. Impact Map: Basic Informa,on Organiza,on Youth-‐Music Organiza1on Objec,ve Provide marginalized youth with technical art skills to lim them out of poverty Ac,vity 30 spots for marginalized youth in hip-‐hop teaching program Repor,ng period 1 year – 50 weeks Pg 41
- 42. Impact Map: Overview Inputs Outputs Definition and Related Reporting Related Reporting Indicators IRIS ID Format Category Indicators IRIS ID Format Category Pg 42
- 43. Inputs Stakeholders What is required for Related this ac,vity? Indicators Pg 43
- 44. Inputs Stakeholders What is required for Related this ac,vity? Indicators Youth Pg 44
- 45. Inputs Stakeholders What is required for Related this ac,vity? Indicators Youth Youth must alend program Pg 45
- 46. Inputs Stakeholders What is required for Related this ac,vity? Indicators Youth Youth must alend # of youth who program alend the programs Pg 46
- 47. Inputs IRIS ID Defini,on and Category Repor,ng Format Unique Client Visits Average number of Product Impact – client visits to Client Informa1on PI8783 facili1es during the repor1ng period. Number of vists Pg 47
- 48. Outputs What do you expect to change What measures could be used? through this program? Related Indicators Pg 48
- 49. Outputs What do you expect to change What measures could be used? through this program? Related Indicators Youth will have the opportunity to launch a career in music, restart their engagement with schools, and create a peer support network that provides access to employment. Pg 49
- 50. Outputs What do you expect to change What measures could be used? through this program? Related Indicators Youth will have the Increased educa1on levels opportunity to launch a career in music, restart their engagement with schools, and create a peer support network that provides access to employment. Pg 50
- 51. Outputs IRIS ID Defini,on and Category Repor,ng Format Student Transi1on Percentage of Product Impact – Rate students advancing Quality & from one level of Performance PI4924 schooling to the next. For example, primary to secondary school or secondary school to higher educa1on. Decimal Pg 51
- 52. Is it significant? Pg 52
- 53. Individual case study Pg 53