Title: Alnoor Ebrahim, Associate Professor, Harvard Business School
1The State of Impact Measurement An update for
the Social Impact Investment TaskforceGuildhall,
London, July 9, 2015
- Alnoor Ebrahim, Associate Professor, Harvard
Business School - Kelly McCarthy, Senior Manager, Global Impact
Investing Network - Daniel Brown, Doctoral Candidate, Harvard
Business School - Correspondence to aebrahim_at_hbs.edu
2At a Glance G71
- Mobilizing
- Convene diverse players (Canada, France)
- Influence legislation (Aus, Italy, Japan)
- Build knowledge base via investor surveys
academic centers (Aus, Italy, US)
- Standardizing
- Process guides (Japan, UK, Germany)
- Process/assurance standards (Germany, UK)
- Outcome standards by industry (France, UK)
- Transparency/reporting (Germany, UK, US)
- Financing
- Pay for Success/SIBs (Aus, Canada)
- Bank of unclaimed assets (Japan)
- Catalyze philanthropic support (US)
Source National Advisory Board updates to Social
Impact Investment Taskforce (2015)
3It is early days (still)
- Though there is increasing understanding of
social impact measurement, the practice is still
under development. (Japan) - Need to develop an impact measurement culture
before setting impact objectives to measure.
(Italy) - Measurement of impact continues to vary on a
deal-by-deal basis. (Canada)
Source National Advisory Board updates to Social
Impact Investment Taskforce (2015)
4- Methods
- Adoption
- Ecosystem
5Guidance (process)
JP Morgan (2015)
Impact Measurement Working Group Social Impact
Investment Taskforce (2014)
EVPA (2013)
6Methods for different stages
Expected Return
SROI
Theory of Change
Logic Model
Mission Alignment
Social Value Criteria
Scorecards
Quasi-Experimental Experimental Methods
RCT
Historical baseline
Pre/post test
Regression discontinuity design
Difference in differences
Post-Investment
Pre-Approval
Due Diligence
Process Alignment
Source Ivy So Alina Staskevicius, (2015),
Measuring the impact in impact investing,
Harvard Business School, MBA independent project.
http//www.hbs.edu/socialenterprise/pdf/MeasuringI
mpact.pdf
7Data Quality
GIIRS GRI SASB SROI
Materiality
Reliability
Comparability
Additionality
Universality
8Data Quality
GIIRS GRI SASB SROI
Materiality v v v
Reliability v v v v
Comparability v v v (v)
Additionality v
Universality v v v
9- Methods
- Adoption
- Ecosystem
10EVPA Guidance Adoption
IRIS Metrics Adoption
How social/environmental performance of investees
is measured
11- So
- Investors appear to be seeking and using
- general guidance and some standardized metrics
- But
- What are they actually measuring?
- How are they judging performance?
12Top 10 IRIS metrics
Rank Registered Users Metric
1 57 Client Individuals Total (PI4060)
2 50 Full-time Employees Total (OI3160)
3 44 Jobs Created at Directly Supported/Financed Enterprises Total (PI3687 )
4 42 Permanent Employees Total (OI8869)
5 41 EBITDA (FP1657)
6 41 Net Income (FP1301)
7 37 Client Individuals Female (PI8330)
8 30 Net Income Before Donations (FP3274)
9 30 Units/Volume Sold Total (PI1263)
10 29 Part-time Employees Total (OI8864)
166 registered users
13Top 10 IRIS metrics
Rank Registered Users Metric
1 57 Client Individuals Total (PI4060)
2 50 Full-time Employees Total (OI3160)
3 44 Jobs Created at Directly Supported/Financed Enterprises Total (PI3687 )
4 42 Permanent Employees Total (OI8869)
5 41 EBITDA (FP1657)
6 41 Net Income (FP1301)
7 37 Client Individuals Female (PI8330)
8 30 Net Income Before Donations (FP3274)
9 30 Units/Volume Sold Total (PI1263)
10 29 Part-time Employees Total (OI8864)
166 registered users. Financial
14Top 10 IRIS metrics
Rank Registered Users Metric
1 57 Client Individuals Total (PI4060)
2 50 Full-time Employees Total (OI3160)
3 44 Jobs Created at Directly Supported/Financed Enterprises Total (PI3687 )
4 42 Permanent Employees Total (OI8869)
5 41 EBITDA (FP1657)
6 41 Net Income (FP1301)
7 37 Client Individuals Female (PI8330)
8 30 Net Income Before Donations (FP3274)
9 30 Units/Volume Sold Total (PI1263)
10 29 Part-time Employees Total (OI8864)
166 registered users. Financial, Operational/HR
15Top 10 IRIS metrics
Rank Registered Users Metric
1 57 Client Individuals Total (PI4060)
2 50 Full-time Employees Total (OI3160)
3 44 Jobs Created at Directly Supported/Financed Enterprises Total (PI3687 )
4 42 Permanent Employees Total (OI8869)
5 41 EBITDA (FP1657)
6 41 Net Income (FP1301)
7 37 Client Individuals Female (PI8330)
8 30 Net Income Before Donations (FP3274)
9 30 Units/Volume Sold Total (PI1263)
10 29 Part-time Employees Total (OI8864)
166 registered users. Financial, Operational/HR,
Social (output)
16Top 10 IRIS metrics
Rank Registered Users Metric
1 57 Client Individuals Total (PI4060)
2 50 Full-time Employees Total (OI3160)
3 44 Jobs Created at Directly Supported/Financed Enterprises Total (PI3687 )
4 42 Permanent Employees Total (OI8869)
5 41 EBITDA (FP1657)
6 41 Net Income (FP1301)
7 37 Client Individuals Female (PI8330)
8 30 Net Income Before Donations (FP3274)
9 30 Units/Volume Sold Total (PI1263)
10 29 Part-time Employees Total (OI8864)
166 registered users. Financial, Operational/HR,
Social (output/outcome)
17Performance challenges
Source GIIN, J.P. Morgan 2015
Given these challenges, how satisfied are
investors with the social performance of their
portfolios?
18Performance relative to expectations
19Measurement Conundrum
- Many challenges to measuring social impact
- Yet investors are satisfied with social
performance! - Highly idiosyncratic practice limited
convergence - Little external scrutiny or reporting obligations
- Few incentives or demands for systematized
information
See GIIN/J.P. Morgan 2015 EVPA 2014.
Investing for Good, Esmée Fairbairn, Big Society
Capital (2015), Oranges and Lemons. New
Philanthropy Capital (2014), Smart Money
Understanding the Impact of Social Investment.
20- Methods
- Adoption
- Ecosystem
21A Growing Ecosystem
Guidance
Metrics
Standards Ratings
22Where are we?
Standardization
Integration
Emergence
Convergence
- Convergence on
- Process guidelines
- Data quality (except additionality)
- Not on
- Metrics (by industry, investment stage, or
investor type) - Performance of investees or investors
Impact Measurement Working Group, Social Impact
Investment Taskforce, 2014