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 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.
BlueMark’s framework is designed to evaluate the completeness and reliability of impact reporting prepared by fund managers for their investors.
BlueMark, a leading provider of independent impact verification and intelligence for the impact and sustainable investing market, today published a framework for evaluating the completeness and reliability of fund managers’ impact reports. The framework is designed to help impact fund managers improve how they disclose their impact results to their investors and to make it easier for investors to assess the quality of the impact reports they receive. The framework, which also provides the basis for BlueMark’s approach to verifying impact reports, is available for download at www.bluemarktideline.com/raising-the-bar-2.
BlueMark’s reporting verification methodology was developed after more than 18 months of research, which included 19 verifications of client impact reports, analyses of 30+ other impact reports and interviews with more than 50 impact investing experts. The most recent phase of the research involved a pilot project with Impact Frontiers, a market-building collaborative for impact investors, and seven of its member-impact fund managers, each of whom paid to have their impact reports verified by BlueMark using the new framework. These seven firms – which work across diverse sectors, geographies, and asset classes – included Anthos Fund & Asset Management, Big Society Capital, Impact Engine, Rally Assets, Japan Social Innovation and Investment Foundation (SIIF), and TELUS.
“Impact reporting is an important part of how impact investors are held accountable for their impact claims,” said Christina Leijonhufvud, CEO of BlueMark. “With this new framework for evaluating impact reports, our goal is to improve transparency and credibility by driving stronger alignment around how we as a field define quality impact reporting, including the specific steps impact investors can take to level up their reports.”
“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,” said Mike McCreless, Executive Director of Impact Frontiers. “BlueMark’s framework helps fill this critical gap in the impact investing market by clarifying the types of information that impact reports should include.”
BlueMark’s reporting verification framework
BlueMark’s research and stakeholder consultation on best practices in impact reporting revealed a great deal of agreement among market actors as to what constitutes quality and decision-useful reporting. Based on these insights, BlueMark designed a framework for verifying impact reporting that is anchored around two key pillars — Completeness and Reliability.
Under the Completeness pillar, BlueMark assesses the scope and relevance of reported information related to an investor’s impact strategy and results at both the portfolio- and investment-level.
Under the Reliability pillar, BlueMark assesses the clarity and quality of impact data presented in the report, including underlying data management practices and systems.
As part of the verification methodology, BlueMark assigns ratings to these criteria to help impact investors understand where they excel in their reporting and where they still have room for improvement. These ratings will be used to create industry benchmarks similar to the BlueMark Practice Benchmark, which was introduced in BlueMark’s “Making the Mark” research series on trends and best practices in impact management.
BlueMark’s methodology focuses on information that is essential for external stakeholders–in particular investors in impact funds–to gauge whether those funds are reporting on the right things and in the right way. It stops short of defining what “good” or “bad” impact performance looks like, which remains a challenge across the impact investing industry due to the limited availability of data on performance measures that would allow for appropriate comparisons across different types of impact funds and strategies.
To date, BlueMark has completed 100+ impact verifications for impact investors managing a combined $192 billion in impact AUM. Approximately 80% of these have been verifications of an investor’s impact management (IM) practices, while the remaining 20% have been impact reporting verifications. BlueMark plans to conduct additional research on the relationship between robust IM practice and quality impact reporting to help advance best practices across the field.
BlueMark is the 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.” 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 Morgan Lewis Publish Whitepaper for Sustainable Investors on Best Practices for Complying with Financial Regulations and Aligning with Industry Standards
Asset managers today must address an ever-growing list of rules and expectations from regulators, investors and other stakeholders about their approach to sustainable investing. From the passage of anti-greenwashing rules in Europe to the launch of new standards for sustainability reporting, it can be a daunting task for investment firms to keep up with the market’s rapidly evolving requirements.
This article was originally published in FundFire and is co-authored by Tristan Hackett, Director, Europe for BlueMark, and Christina Leijonhufvud, CEO of BlueMark.
Private fund managers may know their investors are increasingly embracing sustainable, impact or environmental, social and governance investment approaches – and that regulators across the globe are boosting focus on these strategies.
But managers now face a daunting new regulatory standard – stricter definitions of what constitutes responsible investment strategies that not only exposes these firms to compliance scrutiny, but also lets investors quickly assess whether a private fund meets the mark or is merely wrapping itself in green offering documents.
The U.S. is still taking its first steps on this path, with the Securities and Exchange Commission this year issuing a new ‘Risk Alert’ on ESG investingoutlining the early stages of examining investment advisers for “greenwashing.” But the major shift has taken place in Europe, a market most private fund managers can’t ignore – and that historically has paved the way on ESG issues in the U.S.
The European Union made a gravity-shifting move earlier this year by introducing formal requirements for the Sustainable Finance Disclosure Regulation (SFDR) that represent one of the most direct anti-impact washing efforts to date.
Our recent public statement on the SEC and SFDR warns managers that the earth has moved: “Regardless of which label an investor chooses to use – ESG, responsible, sustainable, impact, etc. – the message from regulators is clear that investors must have the right policies and practices in place to back up what they claim to be doing or the results they claim to be achieving.”
But managers should also recognize that these new standards have the potential to push existing impact management concepts and best practices into the mainstream. SFDR aligns with and reinforces existing impact investing frameworks and standards, like the Impact Management Project (IMP) and the Operating Principles for Impact Management (the Impact Principles). And its activation represents an important inflection point for the financial community broadly – and for the sustainable finance community specifically – in the fight against greenwashing and impact-washing.
SFDR is at heart an anti-greenwashing rule that requires all investment firms operating in Europe to categorize their investment products according to how they approach sustainability risks and opportunities. Investment managers with responsible investing products can choose among three different categories, each with specific and increasingly stringent disclosure requirements. These categories also roughly align with the IMP’s ABC classification framework introduced in 2015, which encourages investors to think more holistically about the positive and negative impacts of their investment decisions.
The first category, Article 6, is the minimum standard, which requires all financial market participants to disclose their policy on integrating sustainability risks and, in doing so, show how they do (or do not) “avoid harm” in their investment decision-making processes.
The second bucket, Article 8, is a higher standard for investment products that are actively promoting environmental and social characteristics, and it requires investment managers to disclose how they seek to “avoid harm” as well as “benefit stakeholders.”
The last grouping, Article 9, constitutes the highest standard, and is generally applicable to funds that have sustainable investment as their core objective. Article 9 requires investment managers to go a step further and disclose how they are actively “contributing to solutions,” particularly as it relates to climate change and other sustainability issues.
The higher bar for Article 9 funds represents a significant nod to many of the existing industry best practices for impact management. But whether an investor aims for a low bar or a high bar, the entire market benefits when there is a shared understanding of who is doing what and why.
Private fund managers should be thoughtful regarding which category they choose. While many investors may opt for the slightly less onerous Article 8 designation, we believe any self-described impact investors should be prepared to be accountable for the Article 9 designation.
Picking a category is merely the first step. Private fund managers will need the right tools and frameworks to get into compliance with SFDR. A good starting point for managers still unfamiliar with IMP and the Impact Principles would be to ensure they have developed a robust thesis that articulates the fund’s concrete ESG or impact objectives (while drawing on industry standards), and that describes how the investment strategy helps to achieve those objectives.
SFDR will not only change the game for managers in their compliance function. Initial data on the European investment universe shows just how far SFDR’s reach could be across managed assets in the market. A recent Morningstar analysis of more than 150,000 investment products found that 20.9% of funds are classified as Article 8 and 2.7% are classified as Article 9, representing $2.5 trillion in combined assets under management. Several of Europe’s biggest asset managers – including Amundi, BNP Paribas and Robeco – are reportedly planning to have at least 75% of their assets aligned with either Article 8 or Article 9 by the end of the year.
The investment management industry’s current impact-washing and greenwashing problem is in large part caused by financial market participants identifying themselves as “impact” or “sustainable” without any concrete evidence to back up such claims. SFDR was specifically designed to confront this problem by increasing transparency and accountability in the marketplace for sustainable investments.
But perhaps just as important is the regulation’s potential to encourage more investors to take the critical next steps, such as signing onto the Impact Principles. The rollout of SFDR could emerge as a turning point in the history of sustainable finance – the moment in which a broad swath of the market agrees on what is or isn’t sustainable and gets to work addressing urgent sustainability challenges.