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 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

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

ImpactAlpha – “Why institutional investors are adding independent verification to their impact due diligence”

ImpactAlpha – “Why institutional investors are adding independent verification to their impact due diligence”

This piece was originally published in ImpactAlpha.

If efficient capital allocation between asset owners and investees is the main function of investment management, then rigorous due diligence is the lifeblood that allows capital to flow.

Now with institutional demand for impact investing products on the rise, due diligence requirements have expanded to encompass impact and ESG as well as financial performance considerations. While this is a positive trend, the additional requirements can translate into greater analytical complexity, thus slowing down capital allocation decisions. This is why many investors are now looking towards third-party impact verification as a valuable tool for streamlining due diligence and separating the wheat from the chaff.

How due diligence has evolved

Since 2018, there have been more than 2,000 ESG-committed private funds in the market targeting about $1.42 trillion in aggregate capital, according to data from Preqin’s 2020 Impact Report, “The Rise of ESG in Alternative Assets.” An institutional investor can’t be expected to conduct thorough due diligence on every fund that crosses its desk, let alone every impact fund. A well-designed screening process helps reduce the target list to just those funds that meet a certain set of gating criteria, saving time and energy for both the allocator and the fund manager and allowing financial markets to function more smoothly.

In recent years, questions about ESG and climate change have begun appearing on investor due diligence questionnaires (DDQs) with increasing frequency, including questions on everything from a manager’s commitment to diversity, equity and inclusion (DEI) to a manager’s recycling program. For instance, nearly half of asset owners (46%) said they want fund managers to supply information on the greenhouse gas emissions and carbon intensity of their portfolios, according to a survey by Cerulli Associates. The same survey found that 70% of asset owners either already require or will soon require asset managers to report on thematic metrics to show how their investments make measurable social and environmental impacts.

As investors seek greater visibility into ESG and impact policies and processes, there is a commensurate need for independent assurance that these practices are both accurately characterized and on par with industry standards.

The growing adoption of impact verification 

As asset owners look to allocate more capital to impact funds, they are looking for reliable ways to identify best-in-class managers. This is where impact verification comes in.

Independent impact verification can make the lives of asset allocators easier by providing a trusted, third-party evaluation of an investment manager’s impact management practices and/or impact performance. An impact assurance provider looks under the hood to determine if the manager’s claims about its impact practices and performance are backed up with evidence, aligned to industry standards (such as the Operating Principles for Impact Management (OPIM) or the forthcoming SDG Impact Standards), and reported in a consistent and reliable way. Just as an institutional investor would hesitate to allocate capital to a fund that lacked a trustworthy auditor or law firm, the same will soon be true of funds missing a reputable impact verifier.

A statement from a third-party impact verifier can provide confidence that a fund’s representations of its impact practices are accurate while also identifying potential areas of impact risk for future monitoring. Given the many different impact investing standards and the dynamic nature of the impact market, this kind of verification statement could help clarify and spotlight the most relevant and differentiated components of a manager’s approach to impact reporting and impact management.

The list of fund managers that have been independently verified is growing at a rapid pace. As of March 2020, 115 impact investors have signed onto the OPIM, which require public disclosure and independent verification of alignment. Nearly half of these signatories have already published their verifier statements, providing essential information for investors looking to allocate to best-in-class impact funds. The SDG Impact Standards are expected to include external assurance and an SDG “seal of approval” for investors seeking to align their investment activities with the SDGs. Other industry standards like the Social Bond Principles also include a mechanism for independent assurance.

A growing number of institutional investors have signaled that they plan to ask fund managers to complete an independent verification as part of their screening and due diligence processes. For example, we have worked closely with one leading development finance institution to verify that prospective fund managers in their pipeline are aligned with best practices in impact investing.

Within the next year or two, we expect impact verification to become commonplace and eventually represent a de facto best practice for impact fund managers seeking to raise capital. As more impact investors enter the market, the insights and benchmarking they receive via an independent verification by a trusted third-party could be what sets managers apart from the competition, especially as prudent asset allocators rely on insights from impact verifications to reduce impact risks and enhance impact results. This market innovation enables not only the efficient allocation of capital, but also ensures that the impact investing industry scales with integrity.

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 30+ impact verification assignments across investor types and asset classes.