Impact reports are often published alongside financial reports, but there is growing frustration that impact performance is not being reported with the same level of integrity as the financials.

BlueMark has embarked on a research project to raise-the-bar on impact performance reporting. 

The first in a series of reports is titled, “Raising the Bar: Aligning on the Key Elements of Impact Performance Reporting”. BlueMark analysed a range of leading reports, while also carrying out interviews with both GPs (report writers) and LPs (report consumers). 

The aim was to understand the current state of impact reporting, to explore the key elements of them, and to offer a pathway to improve the quality of reports. 

“While impact reporting by private markets impact investors is a common practice, the lack of widely-accepted guidelines for reporting on impact performance has resulted in heterogeneous approaches and a perception by end readers that the reports are incomplete and insufficient to meaningfully interpret impact results,” says Christina Leijonhufvud, CEO of BlueMark. 

“Given the market imperative to improve the quality and usefulness of impact performance reports, we wanted to gain a deeper understanding of best practices in impact reporting and propose pathways to accelerate their adoption.”

BlueMark is an impact verification consultancy, and is well-placed to lead the exploration of how impact reports can be improved through clarity and completeness; these are two axis across which the greatest improvements can be made. 

The process saw them sampling 31 impact reports, and consulting with 57 impact practitioners. Their findings pointed towards consistent challenges in terms of: cherry-picking data, missing stakeholder perspectives, and emphasis on successes as opposed to risks or underperformance.

The research also looked at how stones can be laid to build a pathway to better reporting. The responses covered preparations and laying the groundwork, implementing best-practices and leading the market forward. 

Each of the three stages were explored from the perspective of key stakeholders, with examples of work that needs to be done. 

Just as financial reports must be audited, so too could impact reports benefit from verification. Impact verification is at the heart of BlueMark’s service offering, and on this report they’ve worked with Impact Frontiers to pilot an approach to verifying impact reports with a select group of firms.

“The desire to advance beyond impact practice to impact performance is a common refrain among the investors participating in Impact Frontiers cohorts,” said Mike McCreless, Executive Director of Impact Frontiers. 

“The report launched today represents a great step in that direction and we look forward to collaborating with BlueMark and the Impact Frontiers community of investors to continue the momentum.” 

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