As the impact investing market has grown and continues to grow, so has the need for a unified set of standards for measuring the social, economic and environmental impacts of investments in the market. In an effort to address this need and create a workable and pragmatic industry framework, on March 16, 2021, the International Finance Corporation, the Global Impacting Investing Network (GIIN) and several other leading impact investors announced the release of the Joint Impact Indicators (JII), a high-level set of indicators for impact investors to measure and report on their investment activities.
The JII builds on two of the most common sets of impact indicators – the Harmonized Indicators for Private Sector Operations (HIPSO) and the IRIS Catalogue of Metrics – by establishing a set of core metrics in certain key areas that are commonly assessed by impact investors: gender, jobs and climate. With respect to the gender indicators, the JII focuses on metrics related to women in ownership and leadership, female employment and female consummation (i.e., students enrolled, patients served). The JII jobs indicators generally evaluate direct jobs supported and created, as well as offer a separate category for temporary constructions jobs created. The climate indicators focus on GHG emissions and emissions sequestration, water consumption, wastewater treatment, energy consummation, land use and sustainable management of natural resources. Click here to read more about the specific indicators and their associated measurement and reporting standards. Additional indicators are expected to be added at later dates.
Widespread adoption of the JII has the potential to facilitate increased accountability and transparency between impact companies and investors and generate more reliable impact data that can be used to inform investment decisions. Additionally, a standardized industry approach would also reduce the administrative burden that many impact companies experience when required to report to multiple investors that impose different metrics and reporting criteria, thereby enabling those companies to focus their time and resources on their core mission.
Several development finance institutions and private investors have already endorsed the JII. Click here for a list of the those investors and to read their call for others to sign-on to show their commitment to the JII.
The JII are jointly managed by HIPSO and the GIIN. Further development and any adjustments of the JII will be overseen by a steering committee comprised of members of HIPSO, GIIN, and other impact investing representatives.
About Womble Bond Dickinson’s International Development Finance Capabilities
In today’s rapidly growing global investment economy, you can make an impact in emerging markets, while still making a return on your investment – it’s an area of finance that aligns with our team’s experience and passion. We have an understanding of international developmental investing based on many years of representing DFI’s and private investors in projects around the world. Womble Bond Dickinson is part of a worldwide network, which includes offices in the US and UK, alliance firms across Europe, and relationships in emerging markets where our clients do business. Our firm has a deep bench of attorneys experienced in equity and debt finance, a targeted impact economy practice, and support from a transatlantic energy sector team with more than 80 attorneys.