Frameworks for Measuring Impact

Impact measurement is arguably the most important — and most difficult — component of impact investment.

StartingUpGood Magazine
5 min readMay 7, 2018


Many in the field believe that impact investing will only succeed long-term with improvements to impact measurement techniques. With new, big money players comes increased scrutiny — and hopefully, improved outcomes for all.

The opposing forces of standardization and customization are at play here. Investors need to be able to compare the social impact of their investments across companies, industries and geographies. Thus the importance of measurement standardization. However, investors, funds and social impact companies are pursuing a wide array of outcome goals so one size shoe will certainly not fit all.

Many groups are working to develop frameworks that satisfy the needs for both standardization and customization. Below is our overview of the most prominent ones.

IRIS (Impact Reporting and Investment Standards)

The GIIN (Global Impact Investing Network), a nonprofit dedicated to increasing the scale and effectiveness of impact investing, promotes IRIS.

IRIS is a catalog of generally accepted metrics that measure social, environmental and financial performance in an effort to support transparency, credibility, and accountability in impact measurement practices. IRIS serves as the taxonomy, or set of terms with standardized definitions, that governs the way companies, investors, and others define their social and environmental performance.

This tool collects and aggregates data from organizations anonymously to help the industry identify these benchmarks. Users can choose which metrics to adopt and use across a diverse set of sectors and geographies.

GIIRS Rating (Global Impact Investing Rating System)

GIIRS was developed by B-Lab, the nonprofit organization that certifies B Corporations and promotes the benefit corporation structure.

GIIRS is an impact ratings tool and analytics platform that assesses companies and funds on the basis of their social and environmental performance. GIIRS Ratings are the “gold standard” for funds that manage their portfolio’s impact with the same rigor as their financial performance.

GIIRS uses IRIS metrics in conjunction with additional criteria to come up with an overall company or fund-level rating, as well as targeted sub-ratings in the categories of governance, workers, community, environment, and socially and environmentally-focused business models. It also generates data that feed industry benchmark reports.

B-Lab also manages the B Impact Assessment (BIA). The BIA assesses a company’s overall social and environmental performance by measuring its impact on all stakeholders through an online platform. The BIA varies based on the sector and market in which the fund or company operates. BIA provides a judgment (via an objective, comprehensive rating) on how significant a company’s current impact is. It is commonly confused with reporting systems or definition frameworks that detail how a company should go about collecting that impact data.

SASB Standards

The Sustainable Accounting Standards Board (SASB) is an independent, private-sector standards setting organization dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs.

The SASB develops and maintains sustainability accounting standards — for 79 industries in 11 sectors — that help public corporations disclose financially material information to investors in a cost-effective and decision-useful format. The SASB’s transparent, inclusive, and rigorous standards-setting process is materiality focused, evidence-based and market informed.

SASB’s financial materiality focus yields a small set of industry-specific disclosures (on average, 5 topics and 13 associated metrics per industry.) It uses the U.S. Supreme Court’s definition of material information, defined as “presenting a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.”

The SASB standards are voluntary and are not a new set of rules. They can be used by companies in making disclosures in SEC filings and they are recognized by the European Commission as a suitable framework for companies to provide information to investors.

GRI Standards

Based in The Netherlands, the Global Reporting Initiative (GRI) aims to make sustainability reporting standard practice so all companies and organizations report their economic, environmental, social and governance performance and impacts.

Its measurement tool, the GRI Standards, takes a global perspective on reporting publicly on a range of economic, environmental and social impacts. It provides information about an organization’s positive or negative contributions to sustainable development. The modular, interrelated GRI Standards are designed primarily to be used as a set, to prepare a sustainability report focused on material topics. The three universal Standards are used by every organization that prepares a sustainability report. An organization also chooses from topic-specific Standards.

GRI claims to be the first (since 1997) and most widely used comprehensive sustainability reporting standard in the world. It uses a proprietary definition of materiality that serves all stakeholders (not just shareholders): “Material Aspects are those that reflect the organization’s significant economic, environmental and social impacts; or that substantively influence the assessments and decisions of stakeholders.”

International <IR> Framework

The IIRC (International Integrated Reporting Council)is a global coalition of regulators, investors, companies, standard setters, accounting professionals and NGOs. Its <IR> Framework applies principles and concepts that are focused on bringing greater cohesion and efficiency to the reporting process, and adopting “integrated thinking” as a way of breaking down internal silos and reducing duplication. It improves the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital.

<IR> defines materiality as “… of such relevance and importance that it could substantively influence the assessments of providers of financial capital with regard to the organization’s ability to create value over the short, medium and long term.” This framework is available in 11 languages.



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