An overview of Impact Measurement and Management (IMM)
One of the core characteristics of impact investing is that performance must be measurable. If resources are being employed to achieve a desired impact, it is essential to use a framework that tests whether your portfolio of investments are delivering their impact goals. IMM is the process by which impact investors can understand the effects of their investments on people and the planet (measurement) and then take action to adapt processes and improve outcomes (management). For this process to be successfully managed, there needs to be a consistent and disciplined approach, transparency in impact due diligence and reporting, and the use of best-practice IMM frameworks like the IFC Operating Principles for Impact Management (for high-level process management) and the IMP Five Dimensions of Impact (to drill down to activity-level measurement).
IFS Operating Principles for Impact Management:
The IFS Operating Principles have helped to establish a common discipline and alignment around impact management. They integrate impact considerations into all phases of the investment lifecycle.
IMP Five Dimensions of Impact:
The IMP framework supports the Theory of Change by ensuring that you have the appropriate level of clarity for each dimension and a holistic understanding across these dimensions. It also assists with the impact due diligence process as well as the monitoring, measurement and reporting of impact performance.