#13 GKC | 🤝 Know Your Investors - Impact Measurement Best Practices with OPIM

Happy Friday! Another week, another exciting learning on impact measurement :)

Continuing our Know Your Investors Series, in collaboration with Turbo Net Zero.

Turbo Net Zero is a pure-play sustainability consultancy company focuses on delivering ESG value-creation solutions for corporates and investors.

We’ll discuss about the evolving field of impact investing across Southeast Asia in three parts.

1. Overview of global impact investing frameworks (Today’s Episode)

2. Sector-specific impact themes within SEA

3. Case studies of successful impact investors and companies in SEA

Let’s get started!

Introducing The Operating Principles for Impact Management (OPIM)

OPIM, as a comprehensive guide for responsible investment management, provides a clear structure for how investors can ensure their investments generate positive, measurable outcomes while maintaining financial performance.

The 9 core principles of OPIM address the entire investment lifecycle, from setting impact objectives to managing and verifying impact performance. The principles are flexible, allowing them to be applied across different asset classes like private equity, infrastructure, and venture capital.

Since its launch, the OPIM framework has been adopted by over 180 signatories across 40 countries, managing more than $550 billion in assets. These signatories include organizations aiming to align their investments with the United Nations Sustainable Development Goals (SDGs). By following the OPIM framework, investors can systematically manage impact outcomes and track the whole progress.

Core Features of OPIM

The OPIM framework is structured around nine principles that offer practical guidance for managing impact investments. Here are some key technical features:

1. Impact Measurement & ESG Risk Management: For Principle 2 and Principle 5, investors are encouraged to use tools like the SPIRIT Impact Scorecard and IRIS+ to monitor and track key performance indicators (KPIs) related to social and environmental outcomes.

2. Independent Verification: Principle 9 emphasizes independent verification to ensure transparency and accountability.

3. Interoperability with Global Standards: OPIM aligns with other widely accepted frameworks, such as the Global Impact Investing Network (GIIN) and SDG Impact Standards.

How To Use OPIM Framework

Implementing OPIM requires a structured approach to ensure that investment portfolios are aligned with both financial goals and social impact objectives. The following graph outlines how investors can effectively utilize the OPIM framework:

• Define Impact Objectives: Investors must start by setting clear impact goals that align with their overall investment strategies.

• Monitor & Report Impact Performance: Use standardized metrics such as IRIS+ or the SPIRIT Scorecard to track the impact performance of investments.

• Engage in Independent Verification: Investors are encouraged to work with third-party verifiers such as BlueMark to validate their impact claims.

Case Study: BlueOrchard

BlueOrchard, a leader in impact investing, has fully integrated OPIM into its investment processes, particularly in private equity and microfinance. BlueOrchard has developed and refined a robust impact framework named B.Impact Framework using this tool, which comprises three sections: ESG, Impact, and SDG.

SPIRIT ESG Scorecard

The SPIRIT ESG scorecard evaluates the environmental, social, and governance (ESG) risks of each investment, generating a rating for both origination and ongoing monitoring. This scorecard will start by collection relevant ESG data, input it into the tool, and obtain an ESG risk rating.

SPIRIT Impact Scorecard

The SPIRIT Impact scorecard assesses the positive impacts of each investment, aligned with the UN’s Sustainable Development Goals (SDGs). BlueOrchard will first define and collect data on impact objectives and select relevant key performance indicators (KPIs).

Key Takeaways

OPIM’s growing influence highlights the importance of responsible investment practices that go beyond financial returns. This global framework offers valuable guidance for investors in all regions, including Southeast Asia, where adopting OPIM may contribute to sustainable growth and attract international capital.

Next week, we will explore another impact tool, Maximizing Social Value with Social Value International (SVI). Stay tuned!

Again, thank you Turbo Net Zero for this amazing content collaboration.

If you are an impact investor looking to implement ESG strategies OR corporates exploring impact measurement strategies, hit Kenny up!

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Hope this is helpful! 🙂 

Feel free to reach out via LinkedIn or email if you have more questions.

References

• International Finance Corporation

• Impact Principles. (2021). The Impact Principles: Revised Guide

• International Finance Corporation. Impact Investing at IFC

• The Impact Principles

• United Nations Development Programme (UNDP). SDG Impact Standards for Private Equity Funds: Mapping Document OPIM

• Harvard Law School Forum on Corporate Governance. (2019). Operating Principles for Impact Management

• BlueOrchard. Impact at BlueOrchard

• BlueOrchard. (2020). Growing Impact Report: Principle 5 Case Study

• BlueOrchard. (2023). 2023 Disclosure Statement

• BlueOrchard. (2023). January 2023 OPIM Disclosure Statement