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Impact Measurement and Reporting Standards

Prof Durreen Shahnaz January 2011

SMEs Education

Clean energy
Food security Fair trade

Media

Environment

Poverty Alleviation and Sustainable Development

BOP goods & services Housing Insurance

Transportation infrastructure

Telecom

Water / Sanitation Health

Microfinance

Social Enterprises

Impact Investors

IMPACT INVESTMENT EXCHANGE ASIA

Enterprises not ready to list?

Capacity-Building for Social Enterprises

IIXs not-for-profit affiliate
Social Enterprise capacity-building
Social impact assessments Market readiness assessments Financial and social impact reporting Helps SEs meet IIX eligibility criteria

Asia-focused research
Social Enterprise mapping Social impact measurement Regional regulatory research Impact Investor mapping

Impact Investment Success Linked to..

Buy-in from Stakeholders

Investment Readiness Of SE

Impact Investment Exchange Asia

Investor Acceptable Social Measurement

Bangladesh
Rich & diverse NGO sector since 70s 26,000 officially registered NGOs

Large NGOs enjoy wide donor support: BRAC, Grameen, ASA

NGOs now create market oriented entities: Aarong, BRAC dairy, Probotona, WasteConcern Emerging private entities with social orientation: Grameen Danone, Grameen Shakti, Hatey Bunano, Cell Bazaar, Kazi Tea Regulatory framework lagging, growth capital scarce for SMEs

Impact Measurement
One of the greatly discussed issues recently Still no widely accepted standardized methodology Even less so for Social Enterprises (SEs) in Asia Our contribution
We tested methods for SEs in Asia

IRIS
Impact Reporting and Investment Standards
A common language for social and environmental impact
1. 2. 3. 4. Descriptor indicators Key financial indicators Operational indicators Sector-specific indicators Agriculture and Artisanal Energy, Water, and Environment Education Community Development Finance Healthcare Microfinance

GIIRS
Global Impact Investing Rating System
Transparent, standardized, low cost rating system Developed in a collaborative fashion Buy-in from influential industry players Basis for company and fund certification Being tested by 25 partner funds

SROI
Social Return On Investment
Monetizing the impact of an organization

Valuation instead of measurement / rating Wide support and many applications to date Possible to integrate with IRIS Translates impact into financial language

The SROI Network

Accounting For Value

Kazi Tea & Tea Estate

Organic tea farm Panchagarh, Bangladesh

GIIRS: 63.7%
Governance and Leadership Community Employees Environment Consumers 87% 74.7% 65.2% 70% 40%

SROI: 0.14 7.04

Training activities Price premium for certification Local sourcing Wage income for workers Charitable work locally Environment 85% 4% 4% 6% 1% 0.7%

Results
GIIRS: Higher scores for environmentally focused SEs Lower scores for MFIs and education initiatives SROI: Higher scores for education / training initiatives NOTE: One-year timeframe on valuation; environmental returns thus low

From Ideas to Action

Shujog: Market readiness and impact assessment, capacity building workshops, research Impact measurement:
Err on the side of simplicity

IIX: Platforms for channeling private capital for sustainable development Buy-in from investors and intermediaries Get involved!

IMPACT INVESTMENT EXCHANGE ASIA

www.asiaiix.com dshahnaz@asiaiix.com

Thank you!