Fund ID FAQs
All your Fund ID questions, answered in one place.
1.
What is the Fund ID?
- The Fund ID is rating system designed to verify the impact credentials of investment funds.
- This rating system enables investors to make informed decisions by providing an objective assessment of a fund’s impact approach and progress over time. The assessment encompasses the core aspects of a fund’s impact and ESG strategy, governance and management processes, and reported results. The output of the BlueMark evaluation is a Fund ID ratings and assessment report, which provides a shorthand for both fund managers or investors into funds (i.e., allocators) to better understand the strengths and gaps in a fund’s approach and performance.
- You can learn more about the Fund ID by reading the whitepaper, The Fund ID by BlueMark | A new fund-level impact rating.
2.
What is the Fund ID methodology’s relationship to existing and emerging market standards and regulations?
- The Fund ID methodology builds on key elements from several key industry standards, frameworks, and regulations, including the Operating Principles for Impact Management (Impact Principles), SDG Impact, Impact Management and Reporting Norms (Impact Frontiers), Sustainability Disclosure Requirements (SDR), and the Sustainable Finance Disclosure Regulation (SFDR).
- The four pillars of the Fund ID–Strategy, Governance, Management, and Transparency– are modeled on well-established disclosure frameworks in the market, including the Taskforce for Climate-Related Financial Disclosures (TCFD)/IFRS S1 and the Taskforce for Nature-Related Financial Disclosures (TNFD).
- Drawing on BlueMark’s experience in impact verification and benchmarking through tools like the BlueMark Practice Leaderboard, BlueMark Practice Benchmark, and the Raising the Bar research series, the Fund ID sets a high yet achievable standard for impact accountability. The methodology incorporates forward-thinking best practices and innovative frameworks to highlight leading managers and encourage a “race to the top.”
- We will regularly review emerging standards and regulations to ensure the Fund ID methodology remains current and aligned with evolving industry expectations.
3.
What information or materials do investors receive after completing a Fund ID assessment? What should investors do with this information?
- After completing a Fund ID assessment, investors receive a verification statement and a custom seal with the verification date (e.g., July 2024) and the BlueMark logo. The rating is valid for one year, but investors may seek a reassessment if there are significant changes to their impact management processes or portfolio.
- Investors are encouraged to display the seal on their website, marketing materials, and impact performance reports to demonstrate their commitment to transparency and accountability.
- BlueMark also provides a management report, which may include a gap analysis, recommendations, and benchmarking data on specific strengths and areas for improvement. Investors can use this information to refine their impact processes.
4.
When is the best time for a fund to pursue a Fund ID assessment? Can a fund get rated if it hasn’t started to deploy capital?
- Yes, a fund can be rated before deploying capital. There are two versions of the Fund ID assessment based on the fund’s stage:
- Design-Stage: For funds that haven’t deployed capital or are still fundraising. This assessment evaluates the fund’s setup for managing impact but doesn’t include an analysis of its approach to investor reporting.
- Implementation-Stage: For funds that have deployed capital. This assessment covers all aspects of the fund’s lifecycle, including reporting.
5.
How does the Fund ID methodology account for different fund types (e.g., asset class, fund-of-funds, etc.) and strategies (e.g., sector, geography)?
- The Fund ID methodology is principles-based, meaning it is designed to apply across various asset classes, sectors, geographies, and strategies. We continuously monitor Fund ID assessments to ensure the methodology is effective for different fund types.
- Our initial pilot (detailed in the Fund ID whitepaper) tested the methodology on funds and investment strategies in private market asset classes. Based on participant feedback, the methodology can be expanded to include other fund types, such as public equity, fixed income, and multi-asset strategies.
6.
How does the Fund ID incorporate impact results and outcomes being delivered by a fund?
- Alongside assessment ratings primarily based on a fund’s approach and adherence to strong impact processes, the Fund ID captures key impact KPIs and results data from their portfolio–including an impact classification using the ABC framework–to give insights and clarity into a Fund’s progress over time and key outcomes being delivered.
7.
How does the Fund ID consider the financial performance of the fund/investee companies in the assessment and reporting process?
- Fund ID reports are designed to complement a fund’s financial reporting, offering a comprehensive view of fund performance, as recommended by the Impact Performance Reporting Norms. BlueMark is considering integrating financial performance data into future Fund ID assessments.
8.
How do you ensure that the Fund ID methodology doesn’t unfairly penalize emerging and diverse fund managers, managers transitioning to an impact focus, or mainstream managers (in comparison to impact-focused managers)?
- The Fund ID is designed to evaluate impact-oriented assets and therefore is targeted towards investors and products with an intention to consider positive or negative impacts as part of their strategy. The assessment aims to provide decision-useful information to funds at any stage of adopting an impact or ESG orientation.
9.
How do you plan to ensure that the Fund ID remains accessible and affordable for investors of all sizes and types?
- The Fund ID is designed to be affordable, with pricing based on fund AUM using a sliding scale. It is priced lower than our Practice and Reporting Verification services to make the assessment accessible to a broader range of clients. We also offer discounts to managers based in emerging markets.
10.
How do you address the need to separate rating and consultancy services to avoid conflicts of interest?
- We have a conflict of interest policy and a robust system of quality management in place, both informed by the ISAE 3000 standard, to ensure the integrity of our services. Our ratings and verifications are designed as fully independent assessments, providing objective evaluations without any direct advisory support.
- While we offer clients a gap assessment outlining areas for improvement, we do not assist with interpreting or implementing the results. We expect that other consultants, particularly those who specialize in these areas, will be well-positioned to support clients in taking the necessary steps to address the findings of our assessments.