NEWS & PRESSImpact Frontiers Quarterly Newsletter – (Q1 2023)

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March 27, 2024

What’s new?

Insights, Investments, Impact

News from Impact Frontiers

 

Dear Friends of Impact Frontiers,

We are writing to share Q1 2023 updates on our consensus-building initiatives and cohort programming.

Impact for Decision-Making: An Online Curriculum on Impact-Financial Integration

We are delighted to have launched our new, open-access online curriculum on impact-financial integration!

 

Building on the foundation laid by the first Impact Frontiers cohort in 2018-2020 in Impact-Financial Integration: A Handbook for Investors, this public resource synthesizes the insights and learnings that emerged from our eight 2021-2022 cohorts with +60 investors, including a cohort of private market investors affiliated with Impact Capital Managers.

Highlights include:

  • What is impact-financial integration and why does it matter? (Module 1)
  • New examples of integrated investment processes (Module 5)
  • A detailed, step-by-step guide to building an impact rating (Modules 6-12)
  • A survey of the different ways that investors can use impact-financial scatterplot analysis to surface new insights and inform integrated decision-making processes (Module 13)
  • An entirely new approach to impact ratings math (see Module 12 and unleash your inner geek!)

We will periodically update the curriculum based on practitioner feedback and insights emerging from our work with investors in our cohorts. We would love to hear feedback, comments, questions and reflections from this community through the feedback surveys on each page of the curriculum website!

Investor Contribution 2.0

Over the past nine months, we have been working with the Predistribution Initiative to build consensus on updated definitions and resources to help investors manage their positive and negative contributions to impact. We have published an initial set of resources on our project website, which are now under public consultation through the end of April.

These include:

One of the major insights to-date has been, in the case of intended positive impacts, moving away from standardized metrics and toward assessing investor contribution with a ‘plausible narrative’ that addresses the six elements of investor contribution:

  1. Investor actions (e.g., capital allocation and/or non-financial engagement)
  1. Investor-level counterfactual (i.e., what would the enterprise likely otherwise have received from investors?)
  1. Change in enterprise activities (i.e., what did the company do as a result of the investor’s capital and/or non-financial engagement?)
  1. Company-level counterfactual (i.e., what would the company likely have done in the absence of the investor’s capital and/or non-financial engagement?)
  1. Change in outcomes for end-stakeholders and/or the natural environment
  1. Stakeholder-level counterfactual (i.e., what would stakeholders and/or the natural environment likely otherwise have experienced?)

We narrate the rationale for this shift in a short video. The Direct Investment & Engagement Impact Template for Private Market Investors is intended to provide investors with a structured way of thinking through and gathering evidence for each of the six elements above, in order to build a ‘plausible narrative’ for why their action(s) caused or are expected to cause a change in outcomes for stakeholders that wouldn’t likely have occurred otherwise.

We would love to hear feedback, comments, questions and reflections from this community on these resources through our discussion board, via email (info@investorcontribution.org), or in one of our practitioner huddles (register here).

New Cohorts

We have confirmed two new cohorts for 2023!

Strengthening Impact Management 2023-2024

In partnership with the Centre for Advancement of Social Entrepreneurship at Duke University’s Fuqua School of Business, we have launched our second Strengthening Impact Management cohort.

SIMI Japan

We are excited in launching the second Japan cohort this summer in partnership with Social Impact Management Initiative. To learn more, visit this site (Japanese).

New Industry Consensus-Building Initiatives

We have launched three new industry consensus building initiatives. We would welcome your perspectives, insights, and/or questions about these topics!
Impact Portfolio Construction 

We are collaborating with leading asset owners and allocators to identify and synthesize emerging methods of incorporating impact into asset class allocation (or if need be, prototype new methods). The result will be a consensus document of emerging practices on impact portfolio construction, supported by illustrative case studies.

ABC Impact Classification System 

Five years after the launch of the ABC (i.e., Act to avoid harm, Benefit stakeholders, and Contribute to solutions) impact classification system by the Impact Management Project, we are taking stock of its current usage and future potential. Over the coming months we will review industry resources and interview investors to assess the extent to which existing users all understand the definitions the same way; explore whether changes to the definitions are necessary to increase consistency of usage; and explore how the classification system is used or can be used in complementary fashion with other standards, tools, and frameworks.

Systems mapping 

We are exploring how investors can use systems mapping techniques to build theories of change that capture the complex, non-linear causal relationships that affect stakeholder outcomes.

Look out for the next installment of our newsletter in Q2 – onwards and upwards to the Efficient Impact Frontier!

 

Sincerely,
Impact Frontiers Team
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