This article was originally published in Pioneers Post.
LeapFrog Investments, Bain Capital and Calvert Impact Capital are among the impact investors leading the way in impact management, according to verification specialist BlueMark.
Ten investors were revealed this month as part of BlueMark’s latest ‘best practice leaderboard’.
The list is published in BlueMark’s fourth annual edition of Making the Mark, which gives data and insights on best practices in impact management in the impact and sustainable investing market. The report is based on 84 verifications for 75 investors (there may be more than one verification per firm, focusing on different strategies or funds) managing a combined US$209bn in impact assets under management.
BlueMark’s research reveals significant areas for improvement remain
The BlueMark Practice Leaderboard was first published in 2022 and included six investors. This year’s leaderboard contains those six investors (participants are eligible to stay on the leaderboard within two years of BlueMark verification) plus four more.
The impact investors named on the leaderboard are (in alphabetical order):
- Bain Capital Double Impact
- BlueEarth Capital
- British International Investment
- Calvert Impact Capital
- Finance in Motion
- LeapFrog Investments
- Nuveen Private Equity Impact
- Nuveen Fixed Income Impact
- Trill Impact
To earn a place in the leaderboard, investors must score in the top quartile, based on their alignment with the Impact Principles (fully named the Operating Principles for Impact Management). The Impact Principles were launched in April 2019 in an attempt to combat impact-washing and provide a framework to ensure that impact is integrated throughout an investment’s lifecycle. There are more than 170 signatories to the principles across 39 countries. Being in the top quartile means that the investor incorporates all the core elements of impact management as well as going beyond the requirements of the Impact Principles.
The 2023 edition of Making the Mark highlights that less than one third (32%) of investors engage with their target stakeholders such as workers, customers and community members. This is a slight increase on the 28% identified in last year’s sample.
It also points out that the adoption of staff incentive systems linked to impact remains limited; that nearly half of investors do not include an analysis of impact risk in due diligence; and that just 27% of investors are taking consistent actions to ensure that impact can be sustained.
Christina Leijonhufvud (pictured), CEO of BlueMark, which was founded in January 2020 and is a certified B Corp, said: “While we are encouraged by how many more investors are committed to aligning with industry best practices, BlueMark’s research reveals significant areas for improvement remain across key practice areas critical to achieving both impact and financial performance.”