Frequently Asked Questions

Available here is a list of frequently asked questions and their answers.  For people new to the IRIS project and the Web site, this provides a good source of answers to questions that you may have.  If there is a question not answered in the list, feel free to use the contact link provided.

Background Questions

• What is impact investing?
  • Impact investing is capital that is placed outside of pubic equities markets and generates social and environmental value in addition to financial return. (Rockefeller)
• What is impact reporting and investment standards (IRIS)?
  • IRIS is an effort to create a common framework for defining, tracking and reporting the performance of impact capital. This framework will create a “common language” that will allow comparison and communication across the breadth of organizations that have social or environmental impact as a primary driver. For more information, see the IRIS Project Overview (PDF) or watch the IRIS Introductory Webinar (Video).
  • IRIS is not intended to be an exhaustive set of indicators, nor are organizations expected to report on all of the indicators within it, but is rather intended to provide a framework of indicators and their respective definitions that will:
    • Allow investees and intermediary organizations to identify commonly used and standardized indicators which should refine their current performance tracking efforts, and enable comparison to other organizations and contribution to the IRIS data repository
    • Enable member organizations, such as ANDE, GIIN, or FAST to select certain commonly defined indicators and create a reporting framework relevant for their membership groups
• Why develop a framework for assessing social and environmental impact? What are the benefits?
  • In the last few years, there has been significant growth in the amount of capital seeking to generate triple bottom line returns. The progress of this growth is limited, however, by a lack of transparency and credibility in how funds define, track, and report on the social and environmental performance of their capital.
• How did this initiative originate?
  • To address these challenges, the Rockefeller Foundation, Acumen Fund and B Lab initiated the Impact Reporting and Investment Standards (IRIS) effort to create a common framework for defining, tracking and reporting the performance of impact capital. Significant progress has already been made in sectors like Microfinance, where measures, data aggregation and rating tools have been developed. The IRIS initiative will build on sector-specific efforts to create a common language that allows for comparison and communication across the breadth of organizations that have social or environmental impact as a primary driver.
• Who are the intended “users” or audience of the IRIS Framework?
  • IRIS is being developed to address the separate needs of different stakeholder groups. These groups include:
    • Intermediaries or Investment groups: Intermediary organizations will be the users of the taxonomy by identifying, adopting and reporting on relevant IRIS indicators.
    • Investees or capital recipients: Investees or capital recipients will be affected by the IRIS taxonomy through intermediary organizations that may begin to require these groups to monitor and track new social and environmental performance criteria. These entrepreneurs will also benefit from the taxonomy as they will have a more well-defined resource for understanding the various metrics that can influence the flow of capital.
    • Rating Agencies/Member Organizations: These groups will be able to leverage the IRIS taxonomy to set reporting standards for member organizations or to create rating systems that will evaluate the performance of different organizations based on IRIS indicators.
    • Funds/Foundations/Investors: Using the outputs from the IRIS framework, investor groups will be able to direct capital to those organizations that most closely align with the investor groups’ missions.
    • Academia/Think Tanks: Think tanks and academia will be able to leverage a common set of definitions to create methodologies for assessing impact, in addition to outcomes.
• How does this framework compare to other frameworks and why use IRIS instead of other options?
  • The IRIS conceptual framework leverages over a dozen frameworks ranging from the Global Reporting Initiative (GRI) G3 to the International Financial Reporting Standards (IFRS) to the Social Reporting Standards metrics developed by the Social Performance Task Force (SPTF) and The Microfinance Exchange (MIX). Many of these frameworks were designed for specific sectors like microfinance, which has adopted the SPTF metrics, or to encourage standardization and credibility in social and environmental reporting, like GRI. The IRIS taxonomy is designed to function across a variety of sectors to enable better measurement and communication of social and environmental impact. Adapting your current performance data collection to align with the IRIS standard and subsequently submitting data to the aggregator does not preclude you from reporting to other existing standards. In many cases only minor modification to definitions or units of measure will be required.

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IRIS Development Questions

• What organizations have contributed to the development of the IRIS Framework?
  • To-date, IRIS has consulted a number of organizations in the microfinance (MFI), Small and Growing Business (SGB), Community Development Finance Institution (CDFI), and private equity space. It has also worked with Foundations and Investment groups to ensure it has a perspective that crosses multiple sectors.Moving forward, IRIS looks to obtain input from other organizations active in the impact investing space. This feedback will be critical in designing a taxonomy that can meet the needs of all organizations while enabling comparability.
• What was the process for determining the current set of indicators?
  • The current list of indicators was developed through the completion of both primary research (i.e. interviews and discussions with individuals and organizations knowledgeable in this space) and secondary research (reviewing impact investing reports and existing taxonomies). The resulting indicators are an adaptation of many metrics that other organizations are currently using.
• Why did we stop at outputs?
  • The taxonomy captures only outputs, or direct, measurable performance indicators as this reduces the potential issues/concerns associated with the interpretation of those metrics.
• How is the framework organized?
  • The framework has been structured to include four separate reporting layers. Organizations reporting using the IRIS taxonomy will initially enter a set of general descriptor indicators which provide context/background as to the general objective of organization. The second layer involves commonly accepted financial metrics that provide insight into the economic performance of the organization. The third layer includes process indicators that are relevant to an organization’s internal operations, such as employment metrics or wage information. The fourth layer of indicators is comprised of indicators that are specific to organizations focusing their activities in specalized sectors.Although metrics have generally been grouped according to sector, an organization is free to pick and choose those metrics across sectors that may pertain to their particular focus. In this way, an organization can still capture information that is comparable to other organizations, while at the same time tailoring their reporting framework to their own needs.

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Use Questions

• How do organizations use the taxonomy?
  • Organizations review the framework of indicators and select those that are most applicable to their organization. Organizations can then monitor and report performance relative to these indicators.Those organizations that elect to report their metrics into the IRIS data aggregator can leverage the Pulse reporting tool or their own systems to “tag” indicators and to send this data to the central repository. This data will then be available to organizations (at an aggregate level), so that they can compare and assess their performance relative to other organizations.
• Who should collect and report data?
  • Data reporting and entry will not be affected by the transition to the IRIS taxonomy. Most investing organizations and intermediaries have traditionally collected data from their investees, and recorded that into their systems, but some intermediary organizations ask for data submission directly from investee organizations.
• What are some example use-cases of the framework?
  • Please reference the wiki webinar deck for a use-case example of an organization assessing its triple bottom line performance using the IRIS taxonomy.
• Will adopters of the taxonomy be expected to adjust their metrics to align with the definitions in the proposed taxonomy?
  • To enable comparability across organizations and to allow investors to direct capital based on the IRIS framework, it is important to create a consensus around the definitions commonly utilized in the impact investing space.

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Technology Questions

• What technology format will the IRIS framework use?
  • The IRIS framework is not a technology reporting tool per say but rather a common language in an open-source format (XBRL) that will support systems and technologies that either exist currently or are in development. However, Acumen, in conjunction with SalesForce and Google, has developed the Pulse portfolio management system which will be one new option available to organizations seeking to upgrade.
• What is the Portfolio Management System (Pulse)?
  • Pulse is the Acumen’s portfolio data management system for collecting and reporting metrics of small and growing businesses at the portfolio level. Pulse 1.0, available in Q1 ’09 will allow individual funds to track and manage financial and non-financial metrics. Pulse 2.0, available later in 2009, will create a common data repository for the publication of social impact performance for entities reporting against the new standards.
• What is XBRL?
  • XBRL, or Extensible Business Reporting Language, is a derivation of Extensible Mark-up Language (XML). XML, a platform-independent communication standard, has been designed to facilitate the exchange of information between applications through corporate networks or the internet. Supported by virtually all software vendors, XML is gradually imposing itself as the primary facilitator for transferring data over the internet and is now entrenching itself in enterprise applications. XBRL has been specifically designed to leverage XML technology to support the business reporting supply chain.
• How can I access the IRIS framework XBRL taxonomy files?
  • The IRIS XBRL taxonomy files will be published on this Web site during the public comment period.  For those interested in viewing the taxonomy in XBRL format, you will be able download a taxonomy package (zip file) or directly access the taxonomy on this Web site.  Please check back here for additional updates.
• What other groups are currently utilizing XBRL?
  • What are the benefits of using XBRL for defining the framework?
    • XBRL is a universal information format which offers opportunities in terms of cost reduction, efficiency gains and data analysis. XBRL also allows disparate information systems to communicate seamlessly with each other over the internet. The benefits are universal, but specific advantages vary between groups -
    • Investors and Analysts
      • XBRL allows better distribution and usability of existing information
      • Speeds up analysis time and makes information retrieval easier
      • Formatting versatility means information can be tailored to suit specific analysis and reporting requirements
    • Data Aggregators
      • XBRL information supply chains are streamlined and efficient
      • Operating costs associated with data collection and aggregation (i.e. unreliable or erroneous data feeds) are reduced
      • Data aggregators add value to the data and increase their transactions
    • Software Vendors
      • XBRL creates exciting opportunities for interoperability with existing and developing financial and analytical applications
      • Software products that manage financial or operational information can use XBRL for data export and import formats
  • How compatible is the Pulse system with other data management platforms?
    • The Pulse system is built on top of the Salesforce platform. As such, it will easily link in with other Salesforce application and via their standard APIs will be able to be linked to other data management systems.

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Governance Questions

• Who will “own” the data reported using the Pulse system?
  • This has yet to be determined, but the IRIS taxonomy and the data collected from it have been designed as a public good. It is likely that the IRIS data repository will sit with the Global Impact Investing Network organization.Although Acumen is currently the “owner” of the Pulse tool, the intention of this project is to identify a new, independent third-party (such as GIIN) of both the Pulse system and the data warehouse. This organization would then take over the data management role for the IRIS taxonomy as well as house the future governance body.
• How will the taxonomy be updated and revised over time?
  • A governing body will be created that will oversee the evolution of the IRIS taxonomy. This body will likely be housed at the Global Impact Investing Network (GIIN) with one or two full time employees working to establish a system that allows for the revision of the taxonomy over time as comments and feedback are obtained from the broad stakeholder universe.
• Who will have access to the data and at what level will they be able to access the data?
  • Organizations reporting into the common data repository will have access to the information collected from various organizations at an aggregate level. To ensure anonymity of data, a minimal number of organizations reporting on certain metrics will be required before information on those indicators will be released.
• What security measures will be installed on that data aggregator to ensure data confidentiality?
  • The body responsible for the governance of the IRIS taxonomy may also have responsibility for the aggregation and warehousing of data. One of the key elements of this will to assure that the data is stored and managed in a secure environment, and that organizations who wish to keep their data private other than for aggregated reports feel confident in the security of their information.
• How is data quality ensured?
  • Initially, the onus of assuring data quality will fall on the shoulders of the organizations that are recording data relative to their investment portfolio, as it always has. We recognize the importance of credible and consistent data to developing accurate benchmarking and reporting capabilities and in particular the development of a ratings system. As such it may be necessary to add some degree of assurance or data review to the aggregation process.

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Web Site Questions

• How will the comments on the wiki be synthesized and integrated?
  • Comments provided through the Web site will be consolidated and indicators refined to reflect the consensus opinions voiced through the Web site dialogue. These refined definitions will be re-posted to the Web site to allow additional discussion and comment.

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Other Questions

• What is the Global Impact Investing Rating System (GIIRS)?
  • Global Impact Investing Standards Board will leverage the IRIS repository of performance indicators to define a social impact rating system for institutional investors, financial service intermediaries, and companies seeking mission-aligned growth capital and liquidity. These ratings will provide investors with an independent, objective way to assess the social and environmental impact of companies and funds.

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