Spotlight on Impact Leadership June 30, 2022
In this third annual Making the Mark report, the BlueMark team analyzed data based on the aggregated results of 60 practice verifications for impact investors managing a combined $160 billion in impact assets under management. Scroll down for a snapshot of the key elements of this year’s report, and download the full report to learn more!
Making the Mark 2022
The Benchmark for Impact Investing Practice 2022
Introduced in the 2021 Making the Mark report, the BlueMark Practice Benchmark categorizes practice ratings by quartile, providing a mechanism for investors to compare themselves to their peers and to learn from others in the market.
See below for this year’s Practice Benchmark and see how your firm stacks up against the rest of the impact investing industry.
Working together with the BlueMark team on the verification project has been an incredible learning opportunity for us. Their impact expertise and market intel helped us to receive a targeted and concrete understanding of the state of our IM approach; where do we do well and where can we do better.
Marc Moser, Head of Impact, Lightrock
BlueMark Practice Benchmark
BlueMark ratings of investor alignment with the Impact Principles
BlueMark’s Inaugural Practice Leaderboard
In an effort to spotlight industry leaders, we took our Practice Benchmark data a step further this year by publicly naming investors to a “Practice Leaderboard” – based on their achievement of top quartile ratings across all the Principles in our benchmark.
See below for the inaugural edition of the Practice Leaderboard.
See which impact management practices are most common among investors, and which practices still present a challenge for the field.
Despite growing discussion about impact-linked compensation structures, the practice remains limited. Only 38% of impact management systems explicitly integrate impact considerations into staff incentives, with performance development and review processes identified as the most common method (25% of verified investors). Meanwhile, more direct financial accountability mechanisms — such as annual bonuses or impact-linked carry — are less common at 17% and 3% adoption, respectively.
Investors vary significantly in their establishment of ex-ante impact targets, compromising the market’s ability to gauge success. While 63% of impact investors monitor impact performance against an expectation — such as a baseline KPI or qualitative impact rating — the quality of target-setting practices varies widely. For instance, only 22% of verified investors have a clear protocol for engaging investees in the event of impact performance, partly due to the lack of clarity on what over- or under-achievement looks like from an impact perspective.
An increasing number of impact investors are engaging with key stakeholders and actively solicit their input. Less than a third of impact investors (28%) engage with key affected stakeholders and actively solicit their input, an increase of 17 percentage points compared to last year’s research sample. While still a minority practice, the commitment to solicit input from target stakeholders experiencing the impact outcomes is a key part of impact management and monitoring.
BlueMark, a Tideline company, is a leading provider of impact verification services in the impact investing market. BlueMark was founded with a mission to “strengthen trust in impact investing” and to help bring more accountability to the impact investment process. BlueMark is an independent subsidiary of Tideline Advisors, LLC, a certified women-owned advisory firm in impact investing. Since its founding in 2014, Tideline has become a recognized leader in impact management and measurement, working with leading asset owners and managers to design and implement impact management systems.