Investing for Impact: Operating Principles for Impact Management

What are the Principles?

Operating Principles for Impact Management (the Principles) describe the essential features of managing investment funds with the intent to contribute to measurable positive social, economic, or environmental impact, alongside financial returns. This goes beyond asset selection that aligns investment portfolios with impact goals (for example, the SDGs), to requiring a robust investment thesis of how the investment contributes to the achievement of impact.

The Principles have been designed from the perspective of an end-to-end process. The five elements of this process are: strategy, origination and structuring, portfolio management, exit, and independent verification. The nine Principles that fall under these five main elements are the key building blocks for a robust impact management system. As such, they aim to ensure that impact considerations are integrated into investment decisions throughout the investment lifecycle.

The Principles may be implemented through different impact management systems and are designed to be fit for purpose for a wide range of institutions and funds. Also, a variety of tools, approaches, and measurement frameworks may be used to implement the Principles. The Principles do not prescribe which impacts should be targeted, or how impacts should be measured and reported. They also complement other industry initiatives, such as IRIS, and green/social bond principles, which seek convergence towards common approaches to impact measurement and reporting.

Read more on the IFC Investing for Impact: The Principles website.

Additional reports from IFC:

Guide to Investing for Impact: Operating Principles for Impact Management

Creating Impact: The Promise of Impact Investing

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