In 2008, the Rockefeller Foundation gathered a group of pioneering impact investors to identify and begin to address critical barriers to investing for social and environmental impact, while also expecting a financial return. These investors, many of whom became the founding members of the Global Impact Investing Network (GIIN) Investors’ Council identified a lack of transparency and credibility in how funds define, track, and report the social and environmental performance of their portfolios. This scarcity of consistent, credible non-financial performance information also prevented fair comparisons between impact investing opportunities, development of social and environmental performance benchmarks, and other aggregate industry analyses. To address these challenges, The Rockefeller Foundation, Acumen and B Lab began the IRIS initiative to create common metrics for reporting the performance of impact capital.
Acknowledging that significant progress had already been made in sectors like microfinance where standardized metrics, data aggregation, and rating tools had already been developed, the IRIS founders mandated that the IRIS catalog incorporate and build on these sector-specific efforts in order to provide a common language that enables comparison and communication across the breadth of organizations that prioritize social or environmental impact. As a result, metrics in the IRIS catalog are built on over 40 sector-specific standards and reporting frameworks, including those listed below.
In late 2009, IRIS became an initiative of the GIIN, a not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing. One core component of this work is to develop critical infrastructure beyond the mandate of any single impact investor. This includes oversight of the IRIS catalog, which advances impact measurement, a hallmark of impact investing. Impact measurement helps ensure transparency and accountability, and is essential to informing the practice of impact investing and building the field.
In 2011, 29 leading impact investors signed a letter of support for IRIS, recognized standardized social and environmental performance as an industry best practice and strongly encouraging peer “impact investment funds and their portfolio companies to adopt IRIS for their performance reporting.” Read the letter in full, here.
For more information about the role and emergence of standards like IRIS in impact investing, read the MIT Innovations article How Standards Emerge: The Role of Investor Leadership in Realizing the Potential of IRIS.