IRIS provides a common reporting language that direct investors can use to assess the social and environmental performance of portfolio companies across a diverse set of sectors and geographies. Funds that align their reporting with IRIS are not expected to report data for all indicators within the IRIS framework, nor are they precluded from reporting data outside the scope of IRIS. Direct investors can adopt IRIS by identifying a set of applicable IRIS metrics and reporting performance data consistent with the IRIS definitions.
The benefits of adopting standardized social and environmental performance measurement include:
- Credibility - An objective and trusted set of metrics for tracking performance with investees and for communicating with external stakeholders
- Comparability - A reporting framework that can be applied across investments to support performance comparisons, set performance targets, and simplify reporting.
IRIS also enables increased industry-wide coordination, including:
- Consistency - Common reporting standards reduce the reporting burden on social businesses and impact investing portfolio managers by increasing the coherence of reporting requirements.
- Industry Benchmarks - Comparable data gathered across organizations can be aggregated to capture the scope of the industry and to produce industry-wide performance benchmarks. (Note: IRIS is currently working with several organizations to create a repository of IRIS data in order to produce benchmarks on the social and environmental performance of impact investments.)
- Related Infrastructure - Reporting standards form the basis for the development of related services such as ratings agencies and quality assurance providers.
The IRIS adoption process shown to the right is recommended for direct investors who are not currently tracking social or environmental performance data and wish to use IRIS metrics to begin doing so:
The IRIS adoption process SHOWN TO THE RIGHT is recommended for direct investors who are currently tracking social metrics and wish to align with IRIS:
After going through these steps, work with portfolio companies to review any new or updated performance reporting protocols.
For examples of IRIS adoption by an impact investing funds, read about IRIS adoption at Grassroots Business Fund or Acumen Fund’s use of IRIS.