In an article in "startups" which describes itself as "The UK's No.1 starting a business resource" the authors provide an exhaustive overview of impact investing.
- What is impact investment?
- Why is impact investment a good idea?
- Who are impact investors?
- What makes a startup attractive to an impact investor?
- What are the pros and cons of impact investment?
Since impact investors will have a dual focus, rooted in both financial and social purpose one of the major challenges is measuring social impact.
The article describes IRIS Operated by the Global Impact Investment Network (GIIN) which is a rating system that measures impact and closely aligns to the commonly accepted accounting principles, as used by the Securities and Exchange Commission. The GIIN has also developed IRIS+, which aims to translate impact investing goals – such as gender equity, climate change, and affordable housing – into results.
Both IRIS and IRIS+ are designed with the investor in mind, but will show the metrics of measurability a business will be expected to produce in order to win the confidence of an interested impact investor(s).
Another measurement approach, the Global Impact Investment Rating System (GIIRS) created a decade ago, and originally intended to apply sustainability criteria to private investments made through venture capital and private equity funds. GIIRS was the developed by the B Lab, the non-profit organization that administers B Corp certification.
The article goes on to discuss the different types of institutions involved in the impact investment space and the characteristics of enterprises most likely to garner impact investments.
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