BlueMark and CASE at Duke University Publish Impact Best Practices Guide for Asset Allocators

BlueMark and CASE at Duke University Publish Impact Best Practices Guide for Asset Allocators

New guide offers tools and tips for allocators to evaluate and engage with impact fund managers, as well as potential red flags

 

Impact verification specialist BlueMark, together with CASE at Duke University, today published a new guide to impact management for asset allocators – “A Field Guide: Impact Due Diligence and Management for Asset Allocators” – available for download at https://bluemarktideline.com/impact-allocator-guide. The guide, which brings together the wisdom of leading impact investing practitioners and best market practices, is designed to drive more rigor and consistency in how allocators evaluate and manage private market funds that invest for positive impacts on people and the planet.

The guide and the research that informed it was funded by the Tipping Point Fund on Impact Investing, a donor collaborative committed to supporting the creation of public goods critical to long-term growth and integrity of the impact investing industry.

“The asset allocators we spoke to overwhelmingly stressed the importance of continuously learning how to better assess and manage the impact funds that they have trusted with their capital,” said Sarah Gelfand, Managing Director at BlueMark.

“As best practices in impact management continue to evolve, it’s important to level-set about where the market is today and where it needs to go,” said Cathy Clark, Faculty Director for CASE. “While we recognize asset allocators are wary of over-burdening fund managers or creating more friction points when allocating capital, we believe this guide lays out key practices for how and when allocators should engage with managers throughout the investment lifecycle.”

The guide offers tools and tips for allocators during due diligence and as part of their ongoing management of impact funds, as well as potential red flags that could signal a lack of rigor, capacity, and/or intentionality on the part of these managers. The guide also includes practice guides to help highlight differences between light and high-touch engagement and taking into consideration manager’s size, the size of particular investment, and the manager’s thematic focus.

As part of due diligence, the research uncovered key areas for asset allocators to evaluate:

  • Impact Strategy: The manager’s impact thesis, which includes their strategic objectives as well as how they have incorporated these objectives into the fund’s governance
  • Impact Integration in Operations: The ways the manager has integrated its impact strategy into it systems and processes across the investment lifecycle
  • Team Capabilities & Resourcing: The expertise, capacity, and structure of the manager’s team with regard to impact.

Post-investment, the key areas for allocators to focus on when working with managers include:

  • Impact Reporting & Disclosure: Supporting adherence to and use of impact management systems, as well as reviewing reported impact results
  • Impact Monitoring & Improvement: Providing feedback and input to help strengthen the manager’s impact management approach and practice.

The report was released in tandem with a webinar hosted by BlueMark and CASE. Expert practitioners and report contributors representing leading asset allocators and asset managers engaged in a discussion surrounding key takeaways from the report. Specifically, the group discussed ways asset allocators and asset managers can collaborate to promote efficiency and strengthen impact-focused efforts.

About BlueMark
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.

About CASE
CASE is an award-winning research and education center based at Duke University’s Fuqua School of Business. Since 2002, CASE has served as a hub for teaching, research, and practitioner engagement in social impact, and in 2011, launched the CASE i3 Initiative on Impact Investing, the first global program at a leading business school to blend academic rigor with practical knowledge on the growing field of impact investing. Over the past 20 years, CASE has been engaged by some of the most significant global organizations for its rigor, unbiased perspective, and ability to distill and communicate key factors for success in the impact economy. CASE has educated thousands of business students through classes and experiential learning programs, and tens of thousands of impact professionals through online tools, research, thought leadership, and executive trainings to improve their ability to define, manage, and achieve impact. Learn more at https://centers.fuqua.duke.edu/case/.

BlueMark and CASE at Duke University Publish Impact Best Practices Guide for Asset Allocators

BlueMark Publishes New Impact Benchmarks Powered by Growing Dataset on Best Practices in Impact Management

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.

About BlueMark

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.

BlueMark and CASE at Duke University Publish Impact Best Practices Guide for Asset Allocators

BlueMark Raises $10 Million in Series A to Accelerate Adoption of Its Market-Leading Impact Verification Services, Benchmarks, and Analytics

  • S&P Global leads Series A round, alongside other new investors including Temasek Trust Capital, Blue Haven Initiative, Gunung Capital, and Tsao Family Office
  • Ford Foundation and Radicle Impact, which co-invested in BlueMark’s seed round in January 2022, increase their capital commitments in the Series A round

BlueMark, a leading provider of independent impact verification and intelligence for the impact and sustainable investing market, today announced that it had closed its Series A funding round with $10 million in capital commitments from a diverse group of seven investors. The lead investor is S&P Global, with other new investors including Temasek Trust Capital and three family offices with significant experience in impact investing — Blue Haven Initiative, Gunung Capital, and Tsao Family Office.

Ford Foundation and Radicle Impact are also participating in the Series A round, having previously funded BlueMark’s seed round with $2.25 million in equity financing, with Ford Foundation as lead investor and Radicle Impact as co-investor.

The increase in funding will be used to accelerate BlueMark’s leadership position as a premier provider of impact verification, benchmarks, and analytics to institutional investors of all types. Founded in January 2020, BlueMark has completed 125 verifications to date for investors with a combined $206 billion in impact AUM. The firm’s experience with such a large swath of the impact investing industry allows BlueMark to generate a unique set of market information and data. By providing insightful and comparable interpretations of investor impact performance, BlueMark helps optimize capital allocations towards impact. BlueMark also plans to expand its presence across different industries and geographies, with a particular focus on Asia where three of its investors are based.

Christina Leijonhufvud, CEO of BlueMark: “This latest funding round shows how strong the appetite is for greater transparency, accountability, and integrity in the impact and sustainable investing market. BlueMark’s distinctive approach to impact verification, benchmarking, and analytics continually raises the bar on best practice impact management and reporting among investment managers and also helps asset allocators identify and engage with managers driving impact.”

Dr. Richard Mattison, President of S&P Global Sustainable1: “S&P Global is proud to be investing in BlueMark to support much-needed innovation in transparency for impact metrics. More than ever, companies and investors are seeking access to high quality data and advanced analytics relating to sustainability. This investment represents a step forward in enhancing market participants’ access to impact-focused insights.”

Roy Swan, Head of Mission Investments at Ford Foundation: “BlueMark’s work to help impact investors reach for a higher standard in tracking their performance has rightfully earned them a reputation as a leading authority on best practices in impact management and reporting. This next phase for BlueMark signals the growing awareness around the importance of impact investing as a whole, and Ford Foundation is excited to take our partnership a step further.”

Dawn Chan, Managing Director, Investments at Temasek Trust Capital: “Impact and sustainable investing is a focus at Temasek Trust Capital. We see significant growth opportunities for impact investing in Asia and around the world. Independent experts are vital in assessing and assuring that investors are delivering on their impact claims and commitments. BlueMark is a leader in this space, and we look forward to working with the BlueMark team to expand their verification and market intelligence services to new geographies and sectors.”

Kelvin Fu, Managing Partner of Singapore-based Gunung Capital: “We are excited to partner with BlueMark in expanding their impact verification and intelligence capabilities in Asia, a market where we see growing demand for sustainable investments and impact verification services. Having gone through our own journey of establishing impact and sustainable frameworks for investment, we view BlueMark’s methodologies, capabilities, and team as world-class.”

Bryan Goh, CEO at Tsao Family Office: “Tsao Family Office is delighted to support BlueMark in their vital work of bringing transparency, authenticity, and accountability to impact investing.  We believe that BlueMark’s work will enable capital allocators to make more informed decisions and at the same time drive best practice amongst impact asset managers.”

Liesel Pritzker Simmons, Co-Founder and Principal of Blue Haven Initiative: “BlueMark’s industry-leading approach to impact verification brings greater clarity and accountability to the process of selecting and engaging with managers, and ultimately makes life easier for allocators like Blue Haven Initiative. We look forward to working with the BlueMark team to extend BlueMark’s verification services and unique data to the rest of the market.”

The latest funding for BlueMark comes at a pivotal time in the maturation of the impact investing industry. According to the Global Impact Investing Network (GIIN), there is now more than $1 trillion in impact assets under management globally. Now more than ever, the market needs an accountability mechanism to ensure that investors’ claims about their sustainability and impact goals, practices, and results are reliable, accurate, and decision-useful for allocators and other stakeholders.

BlueMark’s impact verification service encompasses an analysis of an investor’s (a) impact management practice (the policies, tools, and processes necessary to execute on their impact strategy) and (b) impact reporting (the completeness and reliability of their reported impact performance).

By aggregating data from these verifications, BlueMark is also able to generate a wealth of insights into industry trends, market challenges, and emerging best practices. BlueMark regularly shares these insights with the impact investing field via a research series on impact management practices (“Making the Mark”) and a series on impact reporting (“Raising the Bar“). These research reports, which have been supported by catalytic funding from organizations like The Rockefeller Foundation and the Tipping Point Fund on Impact Investing, are widely shared across the impact investing industry and can be used as a guideline to best practices for both new and established impact investors.

BlueMark became a certified B Corp in November 2022, joining thousands of businesses around the world that are committed to using business as a force for good.

 

About BlueMark

BlueMark is a leading provider of independent impact verification and intelligence for the impact and sustainable investing market. Founded in January 2020 as a spinoff from Tideline, an expert consultant to the impact investing industry, 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.