Impact Management

For us, managing our impact is just as important as managing the financial performance of the funds we advise. It not only allows us to track our progress towards our impact goals but also provides us with learnings and insights – and ultimately enables us to fine-tune our strategy for enhancing the reach and depth of our impact even further. That is why impact management is integrated into every step of our investment and technical assistance cycle.

Our impact practices are aligned with the Operating Principles for Impact Management, which we signed in 2019.

Strategic Intent

It starts with good groundwork. The “why, what, and how” of achieving impact are defined right in the funds’ strategy documents. We then operationalize these strategic goals through, for example, key performance indicators that consider the fund’s specific impact pathway and align with international development targets.

Origination & Structuring

Each investment decision considers the fund’s strategic impact orientation and how the investment would specifically contribute to that. Only if an investment meets the requirements for financial return and development impact potential, as well as key environmental and social requirements, will it proceed.  Pre-investment assessments also provide an opportunity to identify areas for improvement for which tailored technical assistance is then deployed to strengthen capacities and deepen impact.

Assessing impact

We continuously monitor the impact of our activities. Based on a framework of key performance indicators for each fund’s objectives, we use a tailored system to gauge impact metrics on a regular basis. Assessing our impact provides a constant feedback loop of how well we are progressing towards our goals. It also allows us to gain insights and learning to feed back into strategy and investments, ultimately enabling us to ensure that we deliver on our impact targets. 

Portfolio Management

We require all investees to report on a set of specific indicators that allow us to understand how our funds are being used and who they are reaching. We furthermore conduct periodic, in-depth studies in addition to collaborating on external evaluations and assessments. Our close partnership with and proximity to the investees enables us to maintain a continuous dialogue. Throughout the investment cycle, we use the data we gather through these methods to confirm if financing is being used for its intended and agreed-upon purpose and to monitor impact performance.

Impact at Exit

Our funds largely provide debt capital to support investees in expanding their impactful lending portfolio. As such, the exit is already built into the investment decision. In structuring the investment, the funds also consider, for example, the tenor of the loan that would best contribute to achieving the impact objective. In many cases, we renew and increase our financing to a particular investee. These top-ups provide an opportunity to review the development and continued impact alignment of our investees. When equity investments mature, we, take impact considerations into account to build on the investment’s impact goal and strategy, supporting sustainability of results achieved.

Independent Verification

We are committed to managing our impact in line with the standards set out by the Operating Principles for Impact Management and to striving for accountability and transparency in the industry and our own reporting. As a signatory of the Principles, we issued our first disclosure statement in 2020, and will complete the first independent verification in 2021