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Measuring investment impacts

The Investment Leaders Group (ILG) has developed an original framework to allow the industry to quantify investment impacts. Our aim is to enable a ‘revolution’ in consumer choice in financial services. This means making the social and environmental impacts of investment transparent to financial consumers in the same way that health and other concerns are apparent to food consumers today.

The Investment Impact Framework


In Search of Impact ReportAll investment has an impact on the real world. To a large extent these impacts – for example job creation or natural resource consumption – are opaque to investors, with limited information available from standard information sources.

To address this, the Investment Leaders Group (ILG), in co-operation with the University of Cambridge Institute for Sustainability Leadership (CISL), has developed a new Investment Impact Framework, which was officially launched at an event in London on 31 January 2019.

The new framework meshes directly with the United Nations Sustainable Development Goals (SDGs) and aims to assist investors in understanding the alignment of their portfolios with the commitments of 193 countries, through six impact themes (basic needs, climate stability, decent work, healthy ecosystems, resource security and wellbeing).

The new set of impact metrics is designed to translate the SDGs into measurable indicators that can be calculable, easily understood, and implementable by investors. The University of Cambridge seeks to provide robustness to the model and these metrics could be a guideline for the industry.

The ILG shares a common vision of the future of impact reporting in which all funds will be assessed using a common impact standard such that financial consumers can make informed choices about how and where to invest. This new framework represents an important step in that direction. 

Read the report: In search of impact: Measuring the full value of capital; update: the Investment Impact Framework

 

Further details


In Search of Impact coverThe new Investment Impact Framework refines our descriptions of the idealised ways in which impact should be measured and goes on to explore how far those measures can be applied to investment funds using currently available data.

Visit the publication page to download the report.

 

 

 

 


Impact wideOriginally published in 2016 as In search of impact: Measuring the full value of capital, the framework offered investors a set of six impact metrics, distilled from the 17 SDGs, and tested two of them in practice.  

Visit the publication page to download the old report.

 

 

 

 

Next steps


Looking forwards, the ILG will be mobilising the investment industry to bridge the significant gap between impact metrics that are practical to measure today, given the current data availability and ideal metrics that would provide a useful framework to work towards for policymakers, corporates and data providers.

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Members

Investment Leaders Group members. Cambridge Institute for Sustainability Leadership.

 *HSBC Bank (UK) Pension Scheme

Contact

Kajetan

Kajetan Czyz, Senior Programme Manager, Investment Leaders Group