Preparers are encouraged to report on every investee or asset individually. Optional portfolio-level synthesis can complement investment-by-investment reporting. Entities with hundreds of investments may need to synthesize results across the portfolio, or by themes or segments within the portfolio.1 (See here for example portfolio-level and investment-by-investment reporting templates.2)

Preparers should make it possible for users to assess performance trends over time. Some may include data for multiple years. Others may avoid repeating information previously reported, instead referencing and linking to prior reports. If previously reported information is materially inaccurate and needs to be restated, then it should be included along with an explanation.

Note on Asterisked Items
Some of the suggested content is marked with an asterisk (*). This indicates less consensus in the public consultation that the marked content always needs to be included. Some of this content (e.g., disaggregation of data by certain social identifiers such as race) was strongly endorsed in some contexts but not others (e.g., different countries). Other aspects (e.g., reporting of performance data across the five dimensions of impact for all material outcomes) may create too great a reporting burden if implemented in full. Preparers are encouraged to take this into account.

3.1 Management Commentary

Present the preparer’s overall assessment of impact performance during the period along with rationale.

This may take the form of a purely narrative assessment or include additional analysis of the information presented in 3.2. and 3.3. This may include:

  • Reflections on drivers of past performance and outlook for future performance.
  • Assessment of the relationships between different types or dimensions of impact, or between aspects of impact and aspects of financial performance. If tradeoffs exist, elaborate and describe what decisions have been made to manage those tradeoffs.
  • Learnings that emerged during the period.
  • References to case studies, if included in Section 5.

3.2 Impact Performance

Relevant content for this section includes:

  • Outcomes and impacts of investees/assets on stakeholders and the natural environment;
  • Both positive and negative, intended and unintended results;
  • Measurement as far down the impact pathway as possible (i.e., outcomes or ideally impacts as opposed to proxy metrics of activities or outputs; see Box 2 for more on the impact pathway);
    • For clarity, indicate whether metrics are of activities, outputs, outcomes, or impacts.
    • If outcomes and impacts are not reported, explain how strong the relationship is between the proxy metrics of activities and/or outputs and the intended outcomes or impacts experienced by stakeholders and/or the natural environment. (For instance, the number of students reached might be an output measure intended as a proxy for improvements in student capabilities or knowledge.) Investor contribution, including financial and non-financial, to those impacts and outcomes;3
  • Results relative to entities’ own targets,4 including how targets were set and, if targets have changed since the prior report, the rationale;
  • Results relative to sustainability thresholds,5 including the threshold used, its source, and the rationale for its selection;
  • Evidence that the content presented is a faithful representation of the experiences and views of the stakeholders experiencing the impact;
  • Indication of connections and relationships between impact performance and financial performance;
  • Results across the five dimensions of impact and the associated data categories;*
    • For “Enterprise Contribution,” include consideration of the likelihood that stakeholders and/or the natural environment would have experienced the same outcome or impact in the absence of the enterprise, along with supporting contextual evidence from stakeholder engagement, market research, impact studies, or other sources.*
  • If appropriate, disaggregation of results by stakeholder characteristics (e.g., gender, race/ethnicity, and other social identifiers);6*
  • If appropriate, presentation of performance information using standardized thematic taxonomies (e.g., the IRIS+ thematic taxonomy of the Global Impact Investing Network), ESG and responsible investment frameworks (e.g., UN Principles for Responsible Investment, ESG Data Convergence Initiative, ESG Integrated Disclosure Project, Impact Disclosure Taskforce Guidance), and/or metric sets (e.g., those associated with the Global Reporting Initiative (GRI), Harmonized Indicators for Private Sector Operations (HIPSO), the ICMA Harmonized Framework for Impact Reporting, the IRIS+ Catalog of Metrics of the Global Impact Investing Network, Science-Based Targets, and others);*
  • Explanations of the following:
    • Definition of terms and metrics used;
    • Data sources, assumptions, calculations, and other methodological notes;7
    • Areas of the report where data and evidence are relatively stronger or weaker;
    • Further detail about the time period(s) to which the reported information corresponds:
      • The time period(s) of the information about stakeholders and/or the natural environment (which may be prior to the reporting period).
      • Whether any investments or assets were included or excluded as a result of entering or exiting the portfolio during the reporting period. If relevant, describe whether changes in aggregate portfolio performance arise from changes in performance among existing portfolio companies versus from changes in portfolio composition (i.e., companies being added to or removed from the sample).

3.3 Unintended and/or Negative Outcomes and Impacts

If unintended and/or negative outcomes and impacts are not addressed in Section 3.2., describe them here.8

Note
The term “negative” can refer both to outcomes that are beneath an acceptable or sustainable level or threshold, and to outcomes that worsened significantly during the period. Include those of investee companies and/or the reporting entity itself, along with actions taken to remedy the impact and/or avoid similar impacts in the future.9 Include any links to complaints registries detailing information about the number and nature of complaints received and summarizing the status and outcomes of remediation processes, or similar information about other accountability mechanisms used (see “4. Governance” for details).

3.4 Disclaimer

Preparers may include the following type of disclaimer:

“The information on impact performance presented in this section is accurate to the best of our knowledge and reflects our current access to both investee and third-party data. We have taken steps to ensure we do not intentionally or unintentionally inflate positive impact results or under-report negative impacts. However, we acknowledge there are limitations in the quantity and quality of data available. We have identified and explained the effect of these limitations on the presentation of impact performance to the best of our ability.”

Note on Portfolio-level Reporting
There are two suggested approaches to portfolio-level reporting, and preparers may use either or both. The first is to report against a common set of metrics across investments. This approach, termed “measurement equivalence” by Canada’s Common Approach to Impact Measurement, is often used by investors focusing on greenhouse gas emissions and/or other aspects of the climate or natural environment.

The second approach is to define what characteristics the impacts have in common with reference to thematic taxonomies, the five dimensions of impact, or other criteria, even if the specific metrics differ by investment. In this approach, which the Common Approach to Impact Measurement terms “construct equivalence,” the preparer would use different metrics for different investments and provide a supporting narrative about how the metrics chosen align with the common characteristic(s) described.

Portfolio-wide metrics may take a variety of forms, including but not limited to:

  • Totals (i.e., sum of an impact metric across investments)
  • Averages and/or medians (i.e., average, weighted average, or median of portfolio companies on an impact metric)
  • Measures of inequality, such as inequalities between groups (horizontal inequalities) and between top and bottom performers (vertical inequalities)
  • Measures of deprivation (i.e., the portion of a population measuring below a given threshold)
  • Percentages (i.e., percentage of stakeholders that meet defined impact criteria
  • “Red-yellow-green”-style indicators where definitions and criteria for each are clearly described

See Appendix F for additional guidance on portfolio-level metrics.