Verification represents the next step in the evolution of the impact investing industry, bringing added credibility to the marketplace and holding all impact investors accountable to a shared set of standards, principles, and best practices.
Click below to download Tideline’s benchmark report on impact verification.
What is impact verification?
Impact verification is the review and assurance of an investor’s impact performance or impact management practices against specific industry standards. Typically, this verification would be completed by an independent specialist or an accredited verification provider.
The Operating Principles for Impact Management (“OPIM” or “the Principles”) are one such set of standards for impact management that require all signatories to independently verify their alignment with the Principles.
The benefits of verification
We believe that verification brings three important benefits to the impact investing market:
- Discipline – verification encourages impact investors to take steps to adopt industry best practices, continuously raising the bar for performance across the industry
- Accountability – verification provides a mechanism for evaluating if impact investors’ actions and results are consistent with their claims, ensuring greater transparency and credibility across the market
- Comparability – verification allows stakeholders, whether asset owners, intermediaries, or beneficiaries, to evaluate different approaches to impact investing using consistent frameworks and benchmarks
Tideline’s verification methodology
We began developing our methodology in early 2019, building on the firm’s experience as an impact investing consultant for a wide range of asset managers and asset owners. We started with a process to verify investor alignment with the Principles, which were formally introduced in April 2019. We designed our methodology to be rigorous, efficient, and actionable, relying on a three-step process: Learn, Assess, and Review.
Our comprehensive assessment provides investors and their stakeholders with a holistic picture of their impact management system, helping impact investors understand and institute best practices rather than simply ‘checking the box’ to comply with a verification requirement.
Here are some additional resources to learn more about Tideline’s approach as well as verification in general.
- Making the Mark: Investor Alignment with the Operating Principles for Impact Management (April 2020)
- Integrity through Verification: Tideline’s approach to verifying alignment with the International Finance Corporation’s Operating Principles for Impact Management (September 2019)
- Investment & Pensions Europe: Impact investing market ‘growing and maturing’ (June 9, 2020)
- Responsible Investor: Analysis of first year of IFC impact principles finds “uneven practices” (May 6, 2020)
- ImpactAlpha: Impact management is hot: Recapping Agents of Impact Call No. 15 (April 30, 2020)
- Environmental Finance: Impact investors can better articulate outcomes, says Tideline (April 24, 2020)
- ImpactAlpha: ‘Operating principles’ help investors hold asset managers accountable for impact (April 21, 2020)
- PRNewswire: Tideline Report Highlights Best Practices in Impact Investing Through Verification of Impact Management Systems (April 21, 2020)
- Forbes: Finally a Way to Assure Sustainability and Impact (December 9, 2019)
- ImpactAlpha: Q&A with IFC’s Neil Gregory: A deadline looms for transparency in impact investing (October 15, 2019)
- NextBillion: A Watershed Moment in Impact Investing: The ‘Ninth Principle’ Shifts the Focus Beyond Good Intentions (October 1, 2019)
- ImpactAlpha: Global investment firms adopt IFC principles seeking a market standard for impact investing (April 15, 2019)
- Stanford Social Innovation Review: Best Practices in Impact Management Begin to Take Hold (June 18, 2018)
- Tideline + ImpactAlpha: Making the Mark in Impact Management (April 23, 2020)
- Tideline + the Rockefeller Foundation: Impact Investing’s Next Chapter: Integrity Through Assurance (March 9, 2020)
- SOCAP19: The Time for Action and Accountability in Impact (October 24, 2019)
B Lab – https://b-analytics.net/
- GIIRS Ratings – https://b-analytics.net/giirs-funds
Impact Management Project (IMP) – https://impactmanagementproject.com/
- Impact Frontiers – https://impactmanagementproject.com/impact-frontiers/
Global Impact Investing Network (GIIN) – https://thegiin.org/
- IRIS+ – https://iris.thegiin.org/
- The State of Impact Measurement and Management Practice (January 2020)
Operating Principles for Impact Management (OPIM or ‘the Principles’) – https://www.impactprinciples.org
- Signatories – www.impactprinciples.org/signatories-reporting
- Growing Impact report – https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/growing+impact (June 2020)
- Creating Impact report – https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/promise-of-impact-investing (April 2019)
Principles for Responsible Investment (PRI) – https://www.unpri.org/signatories/reporting-for-signatories/
- Investing with SDG outcomes: A five-part framework – https://www.unpri.org/sdgs/investing-with-sdg-outcomes-a-five-part-framework/5895.article
- Confidence-building measures (CBMs) – https://www.unpri.org/signatory-accountability/introducing-confidence-building-measures-to-pri-signatories-reported-data/2954.article
SDG Impact – https://sdgimpact.undp.org/
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