The Global Impact Investing Network (GIIN) has launched a new tool for agriculture impact investment funds to measure the impact of their investments against others.
Eighteen agriculture impact investment funds have contributed data about some 1,200 investments to the agriculture impact benchmark, 16 of them contributing to its design.
The agriculture impact performance benchmark enables investors to measure their performance across seven key performance indicators (KPIs) such as change in farmer income, how sustainably land is managed, and the mitigation of greenhouse gas emissions.
These KPIs draw on metrics that GIIN’s multi-sector impact measurement platform Iris+ has been tracking for many years, which are essentially more detailed KPIs.
The agriculture benchmark enables investors to score their investments relative to each other and also against their contribution to the United Nations’ Sustainable Development Goals (SDGs).
Why it matters
Impact investing has been on the rise for many years as institutions and individuals seek to generate positive social and environmental impacts in various sectors of the world alongside a financial return. In agriculture, the potential for positive impact is very clear, be it reducing the industry’s impact on the environment, improving farmer livelihoods, or ensuring ethical working conditions along the supply chain.
But understanding and reporting on how impactful your investments are is a complex challenge; there are numerous results to take into account that are not as clear cut as financial performance, which is just one metric.
With the increasing use of environmental, social, and governance (ESG) credentials to market services, investments, and products by a broad range of organizations globally, data-driven and standardized reporting is essential to allay growing concerns about corporate and investor greenwashing.
While GIIN’s Iris+ impact measurement tool has enabled agriculture impact investors to track how their investments are faring across various key metrics related to agriculture, impact reporting has been very much an internal decision around which metrics to use and what weight to put on them. It also lacked the ability to measure funds’ impact performance against each other as there has been no standardized matrix of metrics to measure performance against.
“Given the challenge …
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