This guide is in effect a compendium, or stage-by-stage library, of the key points and questions relevant to each stage in the investment process. These are summarised in an Overview at the start of each section, and then expored in greater detail within, including outlines as to how they can best be understood, and how they relate to other parts of the process.
Different investors will have different areas of focus and, according to their own mission and priorities, different things they care more or less about. This naturally will be reflected in their treatment of impact, which consequently will vary from investor to investor in terms of the weight attributed to the various questions, and the level of detail entered into upon each of them. The purpose of the guide therefore is not to lay out a idealised version of “ultimate best practice” for all impact investors to subscribe to. Rather, it aims to provide a reasonably comprehensive treatment of the different elements at play, and of the major issues attendant upon them. In making impact investments, it remains for the investor to consider each question in turn, and to determine, given their own position, which questions they wish to draw on and develop for themselves, and which they needn’t treat directly (while remaining aware of what they are, and how they may be approached by others).
The principles and practice elements contained within the guide relate primarily to investors investing in front-line impact-generating organisations. For investments into funds, where the capital will be on-invested, the relationship with the actual impact is that much harder to assess directly. However, it is possible to look instead to the fund’s own processes, and the extent to which these accord with best impact practice as set out within the guide. This can form the basis for assessing the fund’s ability to give assurance of impact generation, and the extent to which a strategic approach to impact is really at the core of the fund’s activities.
Throughout the guide, to avoid excessive repetition of the words “social and environmental”, “social” (e.g. in “social outcomes”, “social impact”) is used to include both. Where “target beneficiaries” are referred to, meaning those people who stand to benefit directly from an intervention and its outcomes, these relate in the case of environmental interventions to the equivalent environments or aspects of the global environment that stand to benefit, with “beneficiary outcomes” and “environmental outcomes” equating to each other accordingly. Further help regarding terms is available via the glossary.