ImpactAlpha – “The next building block for impact investing: quality impact reporting”

ImpactAlpha – “The next building block for impact investing: quality impact reporting”

This piece was originally published in ImpactAlpha.

The impact investing industry has matured over the past couple of years, especially when it comes to aligning investors around common standards for disciplined impact management practices.

The Operating Principles for Impact Management (OPIM) and the forthcoming SDG Impact Standards from UNDP, in particular, have created both clarity around the practices required to authentically integrate impact into each stage of the investment process and accountability for those practices through the encouragement or requirement of independent verification.

And yet with each advancement, another missing building block in the impact investment market is revealed. Attention has shifted to the imperative of impact performance reporting standards and, as with impact management practices, both clear standards and a mechanism for accountability are needed. Recent publications by leading sustainability and integrated reporting organizations like CDP, CDSB, GRI, IIRC and SASB; the IFRS Foundation; and the Global Impact Investing Network (GIIN) reflect efforts to define and harmonize both corporate and investor reporting standards.

Impact performance reports today come in all sizes and flavors, reflecting a lack of clarity and consensus on what constitutes quality impact reporting as well as efforts by individual investors to convey their own “secret sauce.” The state of play makes it difficult for asset owners and allocators to interpret the impact performance of their investments, much less to compare one impact fund to another.

Investors are in search of a better approach to impact reporting that incorporates relevant impact goals and metrics along with the qualitative information needed to communicate a holistic, yet digestible, portrayal of the impact of their portfolios.

While we collectively strive for more consistency and standardization, it’s important to keep in mind that robust reporting—whether on impact or financial performance—is both an art and a science, a balance of both qualitative and quantitative information. Impact reporting will always involve a degree of subjectivity, which makes the role of expert, third-party evaluation and verification critical to ensuring accountability, discipline, and comparability, three core pillars of BlueMark’s approach.

Introducing a way to verify impact reporting

In the absence of a universal or harmonized set of impact reporting standards, BlueMark has stepped up to introduce an impact reporting verification service to respond to market demand. We welcome feedback and comments from market practitioners as we seek to continue to refine our methodology to best meet the market’s needs.

Our approach draws on several leading foundational frameworks, including the GRI’s Sustainability Reporting Standards, OPIM, Impact Management ProjectIRIS+, and the SDGs, and encompasses both quantitative and qualitative information necessary for a complete and insightful picture of impact performance.

BlueMark’s approach is organized around five key characteristics of high-quality impact reporting. We can think about these elements as divided between two categories: the reporting framework, on the one hand, and the impact performance report, on the other. While an investor’s actual impact report may focus most heavily on the latter, both levels of information are needed for completeness.


  1. Context – Impact reporting should be supported by robust and clearly articulated portfolio-level and investment-level impact theories of change, including an analysis of the evidence base for the linkages between stated impact goals, assumptions, target outputs, and outcomes. The investor’s particular contribution to achieving impact should also be clearly developed.
  2. Relevance – The relevance of impact goals to the SDGs and underlying SDG Targets should be clearly established, drawing on industry frameworks such as the Impact Management Project’s A, B, C classification scheme. In addition, the reporting should take care to identify the stakeholders – including customers, the environment, local communities, and workers – who experience the positive and negative impacts of the investment strategy.

Performance report-level:

  1. Comparability – An impact report should use objective and transparent impact indicators, drawn wherever possible from industry standards, that allow for the analysis of impact performance over time, relative to expectations, and relative to other organizations. The proportionality of reported impact results to the scale of the investment should also be considered.
  2. Balance – An impact report should feature a discussion of both positive and negative impacts as well as impact and ESG risks. To achieve true balance, the report should also discuss instances of impact underperformance and unintended impacts and what lessons were learned as a result.
  3. Reliability – Impact data, which may come from both primary and secondary sources, should be collected and tracked in a way that drives data quality. Quality control practices should help to ensure that reported impact data is free of manipulation or errors and consistently defined and calculated.

We believe that impact reporting that incorporates these elements is worthy of a high mark, and we look forward to sharing specific examples in future articles.

Given the lack of common standards and dearth of historical impact performance reporting, even the most experienced impact investors are likely to have gaps or shortcomings in their reporting processes. Independent verification of these reports and the underlying systems can help spotlight areas of strength and where there is room for improvement, thereby providing LPs and other stakeholders with the assurance they need while also encouraging investors’ continued advancement towards best practices.

We see the future of impact reporting evolving in much the same way as financial reporting, with third-party verifiers such as BlueMark playing an important role in bringing greater accountability, discipline, and comparability to the market. As impact investors become more comfortable with reporting on a variety of both quantitative and qualitative inputs, the bar of ‘performance’ and best practices will rise across the industry.

Christina Leijonhufvud is the CEO of BlueMark, Tideline’s new verification business. She manages all aspects of business strategy, new product development, and external relations, and has directly led over 20 impact verification assignments across investor types and asset classes.

BlueMark comment letter on IFRS Foundation proposal to create a Sustainability Standards Board

BlueMark comment letter on IFRS Foundation proposal to create a Sustainability Standards Board

BlueMark, a Tideline company, submitted a comment letter in response to the IFRS Foundation’s Consultion Paper on Sustainability Reporting. The full text of the letter is available below and can also be downloaded from the IFRS Foundation’s website here. More information on this effort can be found on the IFRS Foundation’s sustainability reporting project page.


Dear IFRS Foundation Trustees,

Thank you for the opportunity to comment on the IFRS Foundation’s Consultation Paper on Sustainability Reporting. I am providing input on behalf of Tideline, a specialist impact investment consultancy established in 2014, and its sister company BlueMark, a dedicated provider of impact verification services for investors and companies. These comments also draw on my 15+ years of experience in traditional finance and risk management, which includes creating and launching JP Morgan’s Social Finance business in 2007.

We are very encouraged about initiatives underway to establish alignment around a global set of corporate sustainability and ESG reporting standards, two in particular: the first co-led by the five leading voluntary framework- and standard-setters (CDP, CDSB, GRI, IIRC and SASB) and facilitated by the Impact Management Project (IMP) as reflected in their recent Statement of Intent; and the second led by the World Economic Forum’s International Business Council as summarized in their September 2020 White Paper.

In this context, we welcome the entry of the IFRS Foundation and the proposal for a sustainability standards board (SSB) that could help contribute to the development of standards that benefit from the Foundation’s role and experience in defining and overseeing international financial reporting standards. The Foundation’s mission to promote transparency, accountability and efficiency in financial markets reflects squarely the fundamentals necessary to build trust and scale the market for impact and sustainable investments.

We also believe that, to contribute to development of a robust and comprehensive set of sustainability reporting standards that serve the public interest, the SSB should consider the following:

  1. The Foundation should avoid the temptation to assume that sustainability reporting will either lend itself to the same level of numerical precision as, or integrate seamlessly with, financial reporting. In addition to applying the characteristics of useful qualitative information spelled out in the Foundation’s Conceptual Framework for Financial Reporting, we believe the SSB will need to look beyond information that only directly affects an entity’s prospects for future net cash inflows and stewardship of the entity’s economic resources. (See related point #3 below).
  2. We urge the Foundation to engage formally with and draw on the deep expertise of specialized, voluntary market standard-setters that have worked for many years to advance sustainability reporting practices, starting with the group of five mentioned above and including IMP. This engagement should include significant representation on the SSB itself.
  3. The Foundation should adopt a broader definition of materiality beyond the IFRS Standards’ core financial materiality concept, recognizing the “nested” and “dynamic materiality” concepts laid out recently in the Statement of Intent referenced above, which necessitate the consideration of stakeholder interests beyond those of investors. The GRI Standards offer a good model for how such a multi-stakeholder approach can work.
  4. We urge the Foundation to develop upfront a comprehensive set of domain or thematic areas that should be covered by sustainability reporting, ideally before kicking off at the natural starting point of climate-related sustainability reporting. Given that climaterelated reporting offers potential for more quantitative precision and focus than other domain areas, it will be important that the SSB has the broader perspective on the kinds of information required to assure sustainability practices and performance in other themes, such as biodiversity, water scarcity, gender and racial diversity, and social and economic inequality.
  5. It is imperative that the Foundation allows for a range of service providers – beyond the traditional accounting firms – to provide external assurance services to verify the accuracy and completeness of sustainability reporting. We strongly believe that specialized firms like BlueMark bring an expertise and perspective to third-party assurance that extends well beyond the typical sustainability metrics to include the full range of qualitative and quantitative information necessary to form a complete understanding of sustainability practices and performance.
  6. Finally, we encourage the Foundation to continue to solicit the opinions of service providers and industry networks beyond the accounting firms to ensure the inclusion of specialist firms like Tideline. We bring deep sector knowledge and a valuable outside perspective, built on our experience advising many of the world’s largest asset managers and asset allocators on impact management and measurement, as well as industry groups like the B Lab, the Global Impact Investing Network, and 60 Decibels, among others.

We wholeheartedly welcome the opportunity to share our knowledge and experience with the Foundation and others to help ensure the SSB is a success. Thank you again for taking on this initiative and the opportunity for consultation. We would be delighted to discuss any of these issues in more detail if helpful.


Christina Leijonhufvud

CEO, BlueMark, A Tideline Company

Managing Partner, Tideline