Impact Performance Reporting Simplified: 10 Actionable Tips from the Norms

By Mohit Saini, Phenix Capital Group & Nao Sudo, Impact Frontiers 

Up until now, asset managers have drafted impact reports primarily based on their judgment of what information would be most relevant to investors. The lack of standardized guidance and standards has resulted in a hodgepodge of report structures, formats, and content, making it difficult to assess and compare impact management systems and performance reporting across asset managers. 

To address this and make impact reports more decision-useful for investors, Impact Frontiers recently published its "Impact Performance Reporting Norms Version 1." The Norms offer comprehensive guidance to asset managers in private markets to create standalone impact reports or integrated impact and financial reports. The Norms are designed to bring consistency and transparency to impact reporting and make it less burdensome for asset managers and more valuable for investors.  

While we recommend reading the Reporting Norms, here are 10 actionable tips for private asset managers writing impact performance reports. 

Begin by providing an overview of your firm. Describe the portfolio that is the subject of your impact report. Include details such as AUM, asset classes, sector or thematic focus, regional focus, launch year, and overview of capital providers. Mention the expected frequency of reporting on this portfolio. 

Next, elaborate on your portfolio-level impact thesis, assuming it applies to all the investments in the portfolio. Discuss the social and environmental challenges or SDGs (Sustainable Development Goals) addressed, the affected stakeholders and intended outcomes, and the role of investor contribution in the thesis. You can explain the thesis using a theory of change template.  

This introductory section likely would not require frequent updates unless material changes occur since the earlier report. 

Describe your approach to integrating impact considerations throughout the investment lifecycle. Reference any internal or external standards, frameworks, or tools you use (e.g., scorecards). Explain how you integrate ESG (Environmental, Social, & Governance) factors and financial considerations, and detail the process used to identify and manage negative impacts.  

Further, outline how you identify stakeholders and assess the significance of impacts to them. Explain how their perspectives inform your decision-making. Describe your methods of collecting, managing, and using impact data. 

This section is also evergreen and requires updates only if material changes occur since the earlier report. 

This section serves as the guiding light for your impact report, similar to a compass for a navigator.  

Begin with an overall assessment of your impact performance. Reflect on past performance drivers, future outlook, key learnings, and connections between impact dimensions and financial performance. 

Go beyond proxy output metrics, and mention investee/asset level outcomes and impacts. Discuss positive and negative, intended and unintended results. Include financial and non-financial investor contributions. Where possible, use standardized taxonomies and metrics to report on most material social and environmental impacts. Present the impact performance across the five dimensions of impact, comparing them to targets, thresholds, and historical data to show trends over time. Results disaggregated by gender or race/ethnicity can provide a more nuanced picture. 

Due to the variety of methods used for impact measurement and reporting, a single standardized template cannot effectively serve all investors. To address this, Appendix E offers a gallery of portfolio- and investee-level reporting formats. We recommend reviewing these examples to identify formats that best suit your specific needs. 

Ensure that your report content reflects the experiences and perspectives of the stakeholders experiencing the impact. Define the terms and metrics used, and be transparent about your data sources, methodologies, assumptions, and calculations. Use your judgement to decide the appropriate level of detail for inclusion in your report. 

Strengthen your reporting by presenting both qualitative and quantitative information. Qualitative data provides necessary context for your investors, allowing them to interpret impact performance with greater depth and gain nuanced insights into stakeholder experiences that might not be adequately captured by quantitative metrics alone. 

Engage with affected stakeholders using quantitative and qualitative research methods. This could involve surveys, focus groups, or interviews. Understand changes in their well-being or the natural environment and enhance their representation in impact reports. Since your investees are best positioned to lead stakeholder engagement, you can play a supportive role in this process.  

Wherever possible, strive to gather information beyond proxy output metrics. This allows you to report on performance as far down the impact pathway as possible. Qualitative narratives provide a valuable approach to incorporate stakeholder voices into your impact reports. Appendix D offers additional guidance on effective stakeholder engagement practices. 

Report on each investment or asset individually. This approach can be complemented by optional portfolio-level reporting for a broader view. If you are managing hundreds of investments, consider synthesising results across the portfolio by impact themes or sectors. This can be complemented with case studies. Appendix E provides examples of portfolio- and investee-level reporting templates to support your reporting needs. 

Detail your governance structure and disclose information about team(s) or individual(s) responsible for overseeing your impact strategy, targets, metrics, performance, and impact-linked compensation structures. Outline your governance framework for DEI, and reference any frameworks designed by specialists such as the GIIN IRIS+ Racial Equity Lens.  

This section is also evergreen and requires updates only if material changes occur since the earlier report. 

The Norms are designed to be aspirational, voluntary, and non-prescriptive. Think of them as a high-level recipe for impact performance reports. They establish common ground for report content and structure while allowing flexibility for your unique circumstances. 

Tailor your report to prioritize the needs of your investors, while also considering your context, investment strategy, stakeholder and environmental impacts, and available resources and expertise. 

We encourage a phased approach to incorporating all suggested content. During the three-year transition period, be transparent with investors and report users about your approach and progress. The Guiding Principles offer guidance on balancing standardisation and flexibility, and Appendix M provides additional implementation guidance for the Reporting Norms. 

The Norms use a "comply-or-explain" approach. This allows you the flexibility to tailor your reports while ensuring a baseline level of consistency and transparency valued to your investors.  

You are encouraged to follow the Norms as much as possible but have the flexibility to explain your rationale if certain information is not included. It is expected that you will be able to progressively add more content over time. 

The Reporting Norms are a living document, evolving alongside the field of impact investing. Regardless of your current stage in impact performance reporting, these Norms serve as an aspirational roadmap to continuously refine your reporting practices. The impact investing community acknowledges that full adherence to these Norms will take time. However, by embracing this journey and demonstrating your commitment to learning and contributing, you can help drive the market towards even improved reporting practices. 

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The Reporting Norms is a significant step towards creating a more standardised and transparent approach to impact investing. As the field continues to grow, the Norms are likely to play a crucial role in ensuring that asset managers can effectively measure, manage, and communicate the impact of their investments. 

To ensure ongoing relevance and effectiveness, Impact Frontiers will facilitate a pilot phase from 2024 to 2026 with participation from interested parties. As the pilot program gets underway, further revisions and refinements are expected based on feedback from the field. Impact Frontiers expects publishing an improved Version 2 of the Reporting Norms in 2026. For general questions regarding the Reporting Norms, reach out to info@impactfrontiers.org. 

This blog post provides a foundational understanding of the Impact Performance Reporting Norms. Many valuable nuances are still to be explored. Whether you're an investor seeking an independent review of your asset managers' impact reporting or a fund manager eager to delve deeper into how these Norms can enhance your impact reporting, please contact us here.

Mohit Saini works with the Impact Advisory team at Phenix Capital Group. He advises global institutional investors and fund managers on developing and enhancing their impact management (IM) and reporting strategies and solutions. He conducts impact due diligence on fund managers and verifies the alignment of their IM practices with the Impact Principles.

Nao Sudo is Director at Impact Frontiers, where she leads developing content for cohort programs and field-building projects such as Impact Performance Reporting. She previously worked at the Tokyo Stock Exchange, where she built her expertise in timely disclosure, corporate governance, regulation in the capital markets. Nao holds an MBA from Wharton.