A change is needed in the way we measure the social and environmental impact of investments. Being able to measure impact in a consistent matter is crucial to hold the financial sector accountable and drive change. In this blog, we will share with you a few key insights from a leading initiative in the global impact investment space.
The Joint Impact Model: Harmonizing impact measurement
In recent years, frameworks and tools for measuring the impact of investments have emerged across the global financial sector. Such initiatives are appreciated for driving transparency and enhancing impact on topics related to environmental, social and economic factors. However, there has been a growing need for more coherence in impact measurement frameworks.
The Joint Impact Model (JIM) stepped up to this challenge by integrating impact measurement methodologies focused on climate and jobs created into one practical tool. The aim of the initiative is to bring comparability, accountability, and transparency to the financial industry by measuring key impact indicators in a harmonized way.
Their ask: Building the foundations for an independent organization
Since its launch at the start of 2021, the JIM has attracted many users globally. To support the prospected growth of the JIM, and effectively take on the future opportunities in the harmonization of impact investing measurements, the JIM needs to become an independent organization.
In the summer of 2021, NewForesight Consultancy (NFC) was commissioned by CDC and FMO – co-chairs of the JIM’s governing board – to help build the foundations for this organization. We supported the JIM team in developing their organizational design, which includes building a strong vision, identity, members, value proposition, services, revenue sources and organizational structure.
Learnings from the JIM team
We asked Giulia Debernardini, Impact Officer at FMO – Dutch Development Bank andAneese Lelijveld, Executive for the CDC Group Development Impact Evaluations team, to tell us about their experiences and lessons learned on this journey and how they look towards the future. By reading this blog, you will learn from them about transparency and harmonization in impact investing, as well as what it takes to set up an organization.
NFC: According to the JIM team, why is harmonization in impact measurement and reporting needed?
JIM: Measuring and reporting on impact in a consistent and comparable way is essential to evaluate and drive impactful investments. The financial sector has committed to addressing the global issues formulated in the Sustainable Development Goals – particularly to action on climate, jobs, and development. Most financial institutions are stalled on measurement and reporting. They are not yet capable to and track and quantify progress in a standardized way. There are growing accusations of greenwashing and green wishing; and no off-the-shelf tool to fast-track transparency on the impacts of finance.
NFC: What are the key benefits of using the JIM tool?
JIM: The Joint Impact Model (JIM) works towards a vision of transparent, equitable, and accountable financial sector that is geared towards supporting quality, green jobs while reducing GHG emissions by building accountability in the US$140tn finance sector. JIM is a convenient, consistent, and comparable tool to do this for developing countries.
Growing an organization
NFC: What have been challenges in the transition towards becoming an independent organization?
JIM: Our main challenge has been to obtain capital seed. We are a team of impact measurement professionals, not start-up or venture capitalists. We needed to shape our identity and clarify our value proposition to go out there and raise funds.
NFC: How has the NewForesight team helped with this?
JIM: NewForesight has helped us by figuring out our core value proposition and putting together a business case, so that we can go out to foundations and ask for seed capital. This has been incredibly helpful in getting us ready. We learned a lot through the process, and we are now in much better shape!
Lessons learned and next steps
NFC: What other lessons would the JIM team like to share with organizations working to drive transparency and learning in impact investing?
JIM: Impact is a very difficult thing to measure, but it is very important. Making sure you focus and specialize is very important. Also starting small with a key group of people, then sharing with a wider group we have found to be very useful.
NFC: What are the next steps for the JIM?
JIM: We need to raise 2.4 million USD so that we can become financially independent in 5 years. Running a foundation will be challenging but also incredibly rewarding. We are looking forward to it!
A final word from NewForesight
NewForesight is proud to have worked with the Joint Impact Model on their journey to becoming an independent impact-driven organization. If you have similar ambitions or if you have any questions, do not hesitate to reach out. Please contact Silvana Paniagua or Andrea Viviers at NewForesight to discuss the possible opportunities for support.