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Raising the Bar 2.0: BlueMark’s Framework for Evaluating Impact Reporting

In our first report in the “Raising the Bar” series, we summarized the key elements of quality impact reporting that emerged from consultation with 50+ impact investing experts and an analysis of existing impact reports.

In this second Raising the Bar report, we build on this initial work by exploring what a verification framework for impact reporting should look like and how it can work in practice. To test the feasibility and benefits of this refined verification methodology, we partnered with Impact Frontiers (a peer learning and market-building collaboration for asset managers and asset owners) on a pilot project to test the verification methodology with seven impact investors representing a diverse set of strategies and asset classes.

Based on this research, BlueMark designed a framework for verifying impact reports that is anchored around two key pillars — Completeness and Reliability.

Download Raising the Bar 2.0 to learn more about BlueMark’s verification framework, results from the pilot project, and our insights into emerging best practices for impact reporting.

Join the discussion with Impact Frontiers and other field-builders to build consensus around a common approach to verifying impact reporting by investors, including potential alignment with global voluntary standards.

“The impact fund managers we collaborate with have a shared desire for a clear and transparent approach to impact reporting that allows for a more holistic understanding of impact performance. BlueMark’s framework helps fill this critical gap in the impact investing market by clarifying the types of information that impact reports should include.”

Mike McCreless
Executive Director, Impact Frontiers

“We felt it was important that the Trust’s first impact report also stood up to independent scrutiny, so we were delighted to join the pilot project for independent verification of impact reports led by BlueMark. Their recommendations were a helpful input in to setting priorities for the ongoing improvement we aim for in our impact management processes.”

Jeremy Rogers
CIO of Big Society Capital (BSC) and Portfolio Manager of the Schroder BSC Social Impact Trust

“We recognize that impact reporting is an important part of how we communicate our progress and hold ourselves accountable. The verification process helped us see where our reporting is strong and where we have opportunities to improve.

Dimple Sahni
Managing Director of Impact Funds, Anthos Fund & Asset Management

“We want our investors to know that our impact reports are credible and can stand up to scrutiny. We also want to learn and evolve our approach to reporting in line with best practices. The verification process helped us identify ways to better contextualize our impact results and gave us insights about how others are reporting as well.”

Kelly Gauthier
President, Rally Assets

BlueMark’s impact reporting verification framework

BlueMark designed a reporting verification framework that consists of two key pillars — Completeness and Reliability — and four sub-pillars. 

The Completeness pillar focuses on the scope and relevance of the information in the report related to the fund’s Impact Strategy and Impact Results. The criteria for the Impact Strategy sub-pillar encompass the clarity of an investor’s stated impact intentions and approach to contributing to impact at both the portfolio and investment levels. The criteria related to the Impact Results sub-pillar address the reporting coverage of investments in the portfolio, the relevance of reported indicators to the strategy, and the integration of necessary contextual and qualitative information to interpret results.

The Reliability pillar focuses on the clarity and quality of the data in the report, including the rigor of the underlying data management systems and protocols. The criteria for the Data Clarity sub-pillar relate to the disclosure of the investor’s approach to impact and ESG management as well as their measurement methods, appropriate use of industry standards, and transparency of data sources and assumptions. The criteria for the Data Quality sub-pillar relate to the firm’s data management and quality control mechanisms as well as an assessment of consistency between reported data and underlying sources.

BlueMark’s ratings scale

Based on our proprietary rubric, BlueMark assigns ratings using a four-point scale of Low, Moderate, High, and Advanced.

The ratings for a sub-pillar within the framework are determined using a points-based approach, with points awarded based on the presence and validation of key criteria within reporting documents, as further detailed below. The relative points awarded to different criteria reflect their importance based on our initial Raising the Bar research, relevant industry standards and BlueMark’s market expertise, in addition to the quality and coverage of the investor’s reporting against the criteria.

These four ratings allow for comparative insights and peer benchmarks based on a “north star” for quality reporting. They provide a means to assess the ability and willingness of an impact investor to report in a transparent, thorough, and accurate manner about the goals they are pursuing, the results they are achieving, and the learnings they are generating. A key output of the verification is a detailed final report that includes the ratings alongside a narrative rationale and tailored recommendations for improvement based on best practices in the given sector and asset class.

Download the verification framework to see the specific types of criteria used to assign these ratings for each of the four sub-pillars.