SERVICES

BlueMark offers impact verification services, building trust and confidence in investors’ impact practices and performance.

 

SERVICES

BlueMark offers impact verification services, building trust and confidence in investors’ impact practices and performance.

 

What We Do

We evaluate and verify how clients approach the impact in impact investing based on accepted industry standards. BlueMark’s verification services are designed to strengthen confidence in investors’ impact practices and results. Our services are structured around two key pillars of accountability for impact:

  • Impact Management Practice: the extent to which an investor or company has the systems, processes, and capabilities to contribute to achieving the intended impact
  • Impact Performance: the extent to which an investor or company has achieved the intended impact results

The market’s understanding of what constitutes strong impact management practice has advanced considerably in recent years, thanks to standards like the Operating Principles for Impact Management and SDG Impact as well as the field-building work of the Impact Management Project. While standards for impact performance reporting are still in development, there are a number of foundational frameworks that BlueMark draws on to provide clients a diagnostic assessment of the quality and completeness of their impact performance reporting.

In the coming years, we expect the market will evolve towards disclosure and reporting standards for investors and companies that combine elements of both practice and performance and that BlueMark’s services will evolve accordingly.

Practice

The extent to which an investor or company has the systems, processes, and capabilities to contribute to achieving the intended impact

Performance

The extent to which an investor or company has achieved the intended impact results

Our Verification Methodology

We developed our verification methodology to meet the growing investor demand and market expectation for greater reliability and credibility in the impact label, especially as impact claims are more closely scrutinized by a range of stakeholders. Our approach to verification is designed to bring three specific benefits to the impact investing market:

 

Accountability

By evaluating whether impact investors’ practices and performance are aligned to accepted market standards

Discipline

By encouraging transparency, adoption of industry best practices, and shared learning that continuously raises the bar for performance

Comparability

By establishing benchmarks and ratings that allow stakeholders to compare different approaches to impact investing on a consistent basis

We believe these three benefits are essential to scaling the impact investing industry with integrity and are embedded in how we approach each verification assignment.

EBRD has been doing impact investing for more than two decades, but we knew there was more we could learn about how to improve our impact management system. BlueMark brought extensive experience and a well-regarded approach to verification that quickly and effectively assessed the policies, processes and tools that we use for impact management. The BlueMark verification process confirmed several areas of strength, but also highlighted specific areas where EBRD could go further, going beyond simple compliance to benchmarking our impact performance against other industry leaders in impact investing and better positioning us to attract more private impact capital for development.

European Bank for Reconstruction Development (EBRD)
Alan Rousso

Managing Director for External Relations and Partnerships

Hear BlueMark CEO Christina Leijonhufvud discuss best practices in impact management at a recent launch event for BlueMark’s ‘Making the Mark‘ report: 

On May 13th, 2021, BlueMark welcomed impact investing leaders and experts for a virtual event on How to Be an Impact Leader, which featured a conversation on the importance of benchmarking and how a shared understanding of opportunities and challenges can advance the field. Speakers included: Tomi Amosun (Summit Africa), Elizabeth Boggs-Davidsen (U.S. International Development Finance Corporation), Cecilia Chao (Bain Capital Double Impact), Maria Kozloski (The Rockefeller Foundation), and Jeremy Rogers (Big Society Capital).

Overview of BlueMark’s Impact Verification Services

We currently offer three types of impact verification services:

Practice 

Performance

Service

Practice

Mandate

Reporting

Description

Assessment of the degree to which an investor’s impact management system, processes, and capabilities are aligned with market standards

Assessment of the clarity of and supporting evidence for an investor‘s impact thesis, the impact classification of the investor’s strategy and its investments based on industry standards, and the relevance of impact indicators selected for reporting

Assessment of the quality of an investor’s external impact reporting based on industry best practices

Approach

BlueMark analyzes the compliance, quality and depth of an investor’s impact management system and processes, and rates the degree of alignment to key market standards

BlueMark evaluates the clarity of an investor’s impact thesis, its alignment with goal-setting and metrics standards, and the strength of supporting evidence

BlueMark evaluates an investor’s impact reporting based on the relevance, comparability, balance, and reliability of impact information

Value-Add

Establish benchmarks for comparison to market practices and advise on areas of strength and gaps to improve and align with standards

Recommend enhancements for a clear, evidence-based impact thesis aligned with industry standards

Advise on ways to improve impact reporting to Limited Partners and the public in line with market standards and best practices

Clients

Asset managers
Asset allocators
Companies

Asset managers
Asset allocators
Companies

Asset managers
Asset allocators
Companies

Best Timing

Every 1-3 years, based on IM system changes and assurance requirements

Fund formation, launch, or re-capitalization

Annually or otherwise in line with reporting frequency

Key Standards

Key Regulations & Regulators

Mandate

Service

Assessment of the robustness of an investor‘s impact thesis

Approach

BlueMark evaluates the clarity of an investor’s impact thesis, its alignment with goal-setting and metrics standards, and the strength of supporting evidence

Value-Add

Recommend enhancements for a clear, evidence-based impact thesis aligned with industry standards

Clients

Asset managers
Asset allocators
Companies

Best Timing

Fund formation, launch, or re-capitalization

Key Standards

Practice

Service

Assessment of the degree to which an investor’s impact management practices are aligned with market standards

Approach

BlueMark analyzes the compliance, quality and depth of an investor’s impact management system and processes, and rates the degree of alignment to key market standards

Value-Add

Establish benchmarks for comparison to market practices and advise on areas of strength and gaps to improve and align with standards

Clients

Asset managers
Asset allocators
Companies

Best Timing

Every 1-3 years, based on IM system changes and assurance requirements

Key Standards

Reporting

Service

Assessment of the quality of an investor’s external impact reporting based on industry best practices

Approach

BlueMark evaluates an investor’s impact reporting based on the relevance, completeness, comparability and balance of impact information

Value-Add

Advise on ways to improve impact reporting to Limited Partners and the public in line with market standards and best practices

Clients

Asset managers
Asset allocators
Companies

Best Timing

Annually or otherwise in line with reporting frequency

Key Standards

CASE STUDY

CASE STUDY — KKR

In 2018 KKR launched its first dedicated impact investing fund, KKR Global Impact, and, in April 2019, became a founding Signatory to the Operating Principles for Impact Management. The firm recognized that any credible impact investor would need a rigorous approach to assessing and managing impact, and embraced the idea of disclosure and independent verification of its impact management system. In an IFC report, New Insights Into the Practice of Impact Investing, KKR said that the firm “believed that impact accountability is key to scaling the impact investing industry” – not just for the sake of disclosure, “but rather using disclosure and verification to help drive continuous improvement.”

KKR engaged BlueMark to perform the assessment and shared findings that assessed progress to date and provided recommendations on how to further build on the Fund’s work. Given that the external assessment occurred early in the life of KKR’s strategy, the Fund was able to use BlueMark’s insights to help inform the development of its impact management processes, post-investment. For example, KKR built additional impact management considerations into its existing Portfolio Management Committee materials to revisit a transaction’s impact thesis and risks over time and, in 2019, completed an assurance readiness exercise to evaluate its data management and controls procedures.

Adapted from “Growing Impact: New Insights into the Practice of Impact Investing”, International Finance Corporation, June 2020