BlueMark Practice Leaderboard expands to 10 leading impact investors with additions of AgDevCo, BlueEarth Capital, Calvert Impact Capital, and Nuveen Fixed Income Impact
BlueMark, a leading provider of independent impact verification and intelligence for the impact and sustainable investing market, today published its fourth annual “Making the Mark” report with data and insights on best practices in impact management. This year’s report, available at https://bluemarktideline.com/making-the-mark-2023, is based on 84 practice verifications for investors managing a combined $206 billion in impact AUM, making it BlueMark’s largest research sample to date. Leveraging its expanded dataset, BlueMark has for the first time published custom benchmarks by asset class and thematic focus.
BlueMark also announced the addition of four more investors – AgDevCo, BlueEarth Capital, Calvert Impact Capital, and Nuveen Fixed Income Impact – to the BlueMark Practice Leaderboard, joining Bain Capital Double Impact, British International Investment, Finance in Motion, LeapFrog Investments, Nuveen Private Equity Impact, and Trill Impact. The Practice Leaderboard was first launched in the 2022 edition of “Making the Mark” to spotlight those investors who scored in the top quartile based on their alignment with the Operating Principles for Impact Management (or Impact Principles), a leading market standard for impact management practices that forms the foundation for BlueMark’s practice verification service.
Other key data and insights from the 2023 edition of “Making the Mark” include:
- The adoption of staff-incentive systems linked to impact remains limited, with only 31% of verified investors explicitly integrating impact considerations into staff incentives. The most common approach at 25% is through annual staff performance reviews related to impact, including a subset of 15% that make the link explicit through variable pay and bonus structures. However, only 7% of the market has linked their impact performance to carried interest, a mechanism that is only relevant for private equity and venture capital investors.
- 55% of investors include an analysis of impact risk in due diligence, however investors tend to focus their assessments on the likelihood of impact occurring (“execution risk”) rather than assessing potential negative impacts (“unexpected impact risk”). In fact, only 24% of investors include a standardized assessment of negative impacts as part of their processes, which suggests the market has more work to do when accounting for potential negative outcomes in due diligence.
- Less than a third of investors (32%) are engaging with target stakeholders and actively soliciting their input to validate outcomes alongside investee data. While still a minority practice, a slight increase compared to last year’s research sample shows that soliciting input from end-stakeholders (e.g., workers, customers, or affected community members) experiencing the impact outcomes will become a key part of effective impact management and monitoring.
- 27% of investors are taking consistent actions to ensure sustainability of impact creation, while just more than half of investors (60%) have a policy or approach in place to consider the sustainability of impact at and beyond exit. This suggests there is a long way to go before impact considerations take equal precedence to financial considerations and investors proactively identify actions to preserve impact as part of exit strategies. Given exit practices range broadly across asset class contexts, additional norms and consensus best practice across investment strategies will be required for this market practice to continue to improve.
The report also includes case studies on innovations in impact investing, featuring Adams Street Partners, Franklin Templeton, FullCycle Climate Partners, Schroders Asset Management, and Summa Equity.
“The expanded dataset in this year’s ‘Making the Mark’ report reveals an increasingly diverse range of impact investors across asset classes and strategies, reflecting growing adoption of impact management standards across investor types,” said Christina Leijonhufvud, CEO of BlueMark. “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.”
As part of this year’s “Making the Mark” report, BlueMark also updated its analysis of signatories to the Impact Principles. Out of 170+ signatories, 119 had published a verifier statement as of May 2023, of which 15 were internal verifications. BlueMark was responsible for 42, or 40%, of all third-party verifications. In addition, BlueMark conducted 40 practice verifications for investors who are not (yet) signatories to the Impact Principles, signaling the growing demand for impact verification beyond the use case of satisfying the requirements of voluntary standards.
Overall, across all its verification services, BlueMark has completed more than 130 verifications for 95 clients across the investment management industry, which collectively manage more than $214 billion in impact AUM. This is equivalent to about 20 percent of the total impact investing market, based on the latest estimates from the Global Impact Investing Network (GIIN).
In April 2023, BlueMark announced it had raised $10 million in a Series A round led by S&P Global. Other investors in the round included Blue Haven Initiative, Ford Foundation, Gunung Capital, Radicle Impact, Temasek Trust Capital, and Tsao Family Office.
BlueMark is a leading provider of independent impact verification and intelligence for the impact and sustainable investing market. As a certified B Corp, BlueMark’s mission is to “strengthen trust in impact investing” by providing investors with market-leading impact verification services, benchmarks, and analytics. BlueMark’s verification methodologies draw on a range of industry standards, frameworks, and regulations, including the Impact Management Project (IMP), the Operating Principles for Impact Management (Impact Principles), the Principles for Responsible Investment (PRI), SDG Impact, and the Sustainable Finance Disclosure Regulation (SFDR). Learn more about BlueMark and impact verification at www.bluemarktideline.com.