IRIS Framework Overview
In early 2009, Acumen Fund, The Rockefeller Foundation and B Lab, in conjunction with PwC and Deloitte, began working with a small group of stakeholders in the social and environmental impact investment space. These stakeholders comprised a diverse group of organizations representing leading microfinance institutions, small and growing businesses (SGBs), community development finance institutions (CDFIs) and private equity groups that maintain a social or environmental focus to their portfolios.
This group has started drafting a framework for measuring social and environmental performance based on a set of common indicators and definitions. The intent is for this framework to be applicable across sectors, and success requires the participation and adoption from a broad set of stakeholders representing the various facets of the social and environmental impact space.
Currently, the IRIS framework consists of six parts:
- The social performance standards framework and description
- Descriptor Indicators that focus on the organization’s mission, products and services and the target markets that the organization intends to affect
- Financial Indicators that are expected to be commonly reported on for all organizations regardless of size or operational mode
- Operations Indicators which are applied to organizations depending on their operational type and value-chain function
- Sector-Specific Indicators:
- Glossary and definitions of common terms and indicators
The framework will evolve, grow and improve over time. The initial version of the framework, developed in March of 2009, identifies the high level metrics and indicators common to many organizations. Subsequent versions will expand to include a more comprehensive set of indicators and metrics.
The framework is meant to capture the “common” indicators but there are areas where additional granularity, such as “skill level” of jobs and demographic details like “gender” may be useful. Not all organizations collect this data, but those that do should report it here and those that do not may consider collecting and reporting that data in the future.
This common language is a critical component of the enabling infrastructure needed to scale up the impact investing industry. A common set of standards to define, measure and report social and environmental impact will provide transparency and credibility needed for investors and can enable improved performance for investees through increased investment capital and the ability to benchmark performance against peer organizations.
