Mission first and last

The survey highlights four practices common to high-performing impact investing funds, the first being Mission First and Last. Successful funds strive towards a clearly embedded strategy and structure that establishes equal footing for both financial and social objectives in their decision-making processes. This theme illustrates the importance of impact metrics and considers the entire lifecycle of investment.

Align accountability with mission

The second finding of the survey emphasises the importance of transparency and rigorous impact reporting. The right metrics should be proportional to the fund’s mission, with details of what those entails being agreed upon by all stakeholders. Through alignment, funds can deliver superior financial returns along with positive social impact outcomes.

Track mission-direct metrics and strengthen feedback loops

The research concludes that fund design is paramount in impact investing. High-performing funds track mission-direct metrics effectively and utilise the same processes, analytical methods, and deal terms of any mainstream investor. An alignment of accountability with a strong feedback loop supports and strengthens impact reporting.

Ensure financial discipline in investment

The fourth theme of the research underlines the need for an adequate balance between investment returns and social impact. While impact investing is a new and emerging field, deviating too far from conventional processes of underwriting, risk mitigation, and accountable management could lead to a diminished commitment to social impact. Successful impact investing funds stay repeatedly disciplined in the development of a committed investment strategy.

The survey research also highlights the fact that governments have been crucial players in the financing of impact investing and creating a supportive regulatory environment within which the best funds can prosper. It is essential to be aware of the policies that apply to impact investing, and good relationships should be fostered with policymakers.

Overall, this research points towards significant progress in the field of impact investing, and the survey presents clear insights into the practices of high-performing funds. The report concludes that Mission First and Last encourages investors to combine explicit impact intention with operational accountability to impact. The commitment to transparency and rigorous impact reporting is fundamental to success, as are the right metrics which should support strong feedback loops for social performance. Finally, funds must ensure that financial discipline is critical to success.

This study can be used as a guide to the best practices for the impact investing community. For example, funds should use rigorous data analytics to select the right organisations, track performance, and evaluate the efficacy of investments. Furthermore, the establishment of a robust framework of metrics and effective accountability measures is of critical importance. The research recommends that stakeholders involved in the impact investing industry maintain a constructive dialogue with policymakers, investors, and other players in the ecosystem to ensure that the field continues to flourish.