With the continued growth of the new impact investing industry, social responsibility and impact are becoming key factors in investment ratings and development. An issue currently facing this asset class is a lack of tools that can be used to analyze and report impact, which acts as a barrier to increased capital flows and greater participation from a broader set of investors.
To facilitate this new desire to invest for impact rather than to solely grow capital, and to reassure socially-conscious investors of the impact of their money, the Global Impact Investing Rating System, or GIIRS, is a rating system that can be used to track the level of impact of investors’ money. The rating system builds on the IRIS Catalog of Metrics in conjunction with additional criteria to come up with an overall fund score for a variety of business models in which the fund invests. Funds can then be recognized for their investment performance by electing to be recognized as GIIRS rated. GIIRS also allows an investor or donor to view their impact when applied to many different industries, such as healthcare, education, and more. It is a system that allows investors to objectively understand the environmental and social impact of emerging markets and funds with a more finance-based approach and a higher applicability to private corporations.
In addition to being able to track impact investors’ money, metrics used in GIIRS are able to determine an overall rating on a fund’s social and environmental impact. This emerging ratings system, powered by the B Impact Assessment, has now grown and is used by over 15,000 users in 57 countries and 176 industries. Even with its growing usage on the global scale, the GIIRS is standardized between countries allowing the GIIRS to establish ratings on social and environmental impact, irrespective of an organization’s geography. Because of its standardizability, GIIRS ratings are currently the gold standard for impact investment and measurability. They provide rigorous, comprehensive, and comparable ratings for any company or fund for their social and environmental impact.
In order for the rating to be generated, funds need to be assessed. And this means collecting data from all the companies and assets in a portfolio. Tools like the B Impact Assessment primarily provide assessment and visualization services at points-in-time, but the actual data gathering, reconciliation, analysis, and reporting is largely left to manual, Excel-based work. In addition, fund managers often don’t have visibility into performance between reporting periods, which means that they also have limited tools to manage and guide their assets to higher performance on impact measures. A good example would be the ongoing COVID-19 pandemic, which has created unprecedented pressures on companies and communities alike; without up-to-date reporting from across their portfolio, fund managers have relied mostly on anecdotal evidence to understand whether companies in their portfolios are responding adequately to support and engage employees, communities, and customers through the crisis.
This is where Corecentra plays a fundamental part in offering a solution for companies to manage performance in real-time, standardize and track data, and automate analysis and reporting in record time. Our goal is to accelerate and enhance the quality of reporting, while allowing companies and investment managers to redirect resources from labor-intensive data gathering to the actual process of improving their impact.
If you’re interested in learning more about GIIRS, please feel free to reach out to Anish Nagar (email: anishnagar [at] corecentra.com). Anish is the CEO of Corecentra Solutions, a software company providing purpose-built digital solutions for socially conscious and outcomes-focused companies, foundations, nonprofits, and frontline government agencies.
Corecentra provides advanced digital tools for organizations to manage, monitor, and report their social performance and impact. We help socially-conscious companies, impact investors, foundations, nonprofits, and frontline government agencies manage portfolios and programs, aggregate and analyze data, and easily report outcomes to key stakeholders. By seamlessly integrating program management, budgeting & finance, stakeholder engagement, predictive analytics, and impact assessment, our products empower organizations to increase their social impact and deliver a quantified view of social performance to investors, donors, beneficiaries, employees, and communities.