We were excited to partner with the American Evaluation Association Social Finance TIG to dive deep into the important topic of "Maximizing Learning & Improvement in Impact Measurement and Management (IMM) - Lessons Learned for Impact Investors."
Moderated by Head of Secretariat Joohee Rand, this engaging discussion featured Signatory panelists from the International Finance Corporation (IFC), Trill Impact, Closed Loop Partners, and MicroVest Capital Management.
The panel focused on Principle 8, which requires investors to assess each investment’s achievement of impact—expected and unexpected, positive and negative—and use these findings and lessons to improve future investment decisions and management processes.
Read below for key takeaways from three topics we addressed in the webinar:
1. Impact assessments and the identification of lessons learned for continuous improvement of strategies and processes
- Learning and improvement need to be embedded in the design of the IMM system throughout the entire investment lifecycle.
- Gaps between expected outcomes and actual results, benchmarked performance against industry standards, and the assessment of unintended outcomes are useful ingredients for institutional learning
- Certain governance structures (e.g., performance review committees) and tools (e.g., impact reports) are effective for continuous monitoring and active management.
2. Challenges in maximizing learning/improvement and the role of third-party research/independent verification
- The intention to learn is often constrained by challenges in obtaining useful data and the potential burden on private sector clients. Getting clients’ feedback on the IMM framework could address some of the constraints.
- Diverse clients, investment strategies, and investment timelines can make meaningful learning more complex and difficult. These challenges can also lead to the development of innovative solutions (e.g., an impact scoring/rating tool).
- Independent verifications and different types of evaluations play an important role in promoting deeper learning through feedback on the IMM system.
3. How to build a culture and system of continuous learning
- An IMM framework needs to be built as an end-to-end process with an orientation towards transparency, clarity, and continuous learning orientation.
- Leadership's backing and the operational team’s buy-in are critical for strengthening prioritization and capacity for learning.
- Sharpening the focus on real impact as well as integrating impact throughout the investment process are also essential.