Portfolio company Neighborly reviews common strategies for designing impact investments - particularly the need to understand the client's story and values. "It's not enough to simply check the boxes on the usual quantitative metrics."
It’s not enough to simply check the boxes on the usual quantitative metrics when it comes to Impact investments. We need to ensure a united path between the client story, the investment objective and the managers and firms that implement the strategy. This entails a discussion with management and a deeper dive into why they are running the strategy. We frequently hear the response, “because the firm wanted to move in this direction.” A manager looking through this lens (more of an inconvenience than a mandate) will likely not produce the Impact results that come full-circle back to the client’s story. They don’t need to disown cars to run a fossil-fuel free strategy, but they do need to believe that they are making a difference, and embody that difference in their own values — or at minimum, the organization’s philosophies.