IRIS+ and the SDGs: A Guide to Impact Performance Measurement

The GIIN builds critical market infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. IRIS+ is managed as a public good by the GIIN. Impact measurement and management (IMM) is a hallmark of impact investing. The vision of the GIIN is for social and environmental factors to be integrated into investment decisions simply by default, as the 'normal' way of doing things. Impact investing can play a central role in realizing this vision by setting and raising the standards for investment practice and generating the tools and data that allow investors to evaluate impact and channel capital to the most effective solutions. IRIS+ is a system that makes it easier for investors to translate their impact intentions into real impact results. Key features of IRIS+ include alignment with the UN Sustainable Development Goals (SDGs), including both SDG Goals and targets. IRIS+ is also aligned with other major frameworks and conventions, including the five dimensions of impact and more than 50 metrics frameworks, standards, and platforms. The SDGs comprise Goals, targets, and indicators, with Goals and targets aligned to IRIS+. The SDGs are the globally recognized to-do list for the world's most urgent development challenges. As of 2018, 55% of all impact investors tracked at least some of their investments' performance toward the SDGs. Despite this enthusiasm, it remains unclear how investors can measure, manage, and track their progress in a common, shared way toward the targets set forth by the SDGs. To address this challenge, IRIS+ translates the SDGs into aligned IRIS metrics that investors can use throughout the investment management process. Impact investors and other impact investing stakeholders that rely on the SDGs to set and report their impact goals can use IRIS+ in two ways: IRIS+ Core Metrics Sets and IRIS Catalog of Metrics. IRIS+ Core Metrics Sets are backed by evidence and based on best practice, enabling comparison of data and helping illuminate material understanding of impact performance. The IRIS+ thematic taxonomy is built from Impact Categories, Impact Themes, and Strategic Goals. Each IRIS+ Core Metrics Set corresponds to a specific, commonly deployed Strategic Goal, such as Improving Financial Health or Improving Energy Alternatives for Cooking. All IRIS+ Strategic Goals and their corresponding Core Metrics Sets are aligned with the SDGs at the Goal level. Therefore, investors that describe their impact goals using SDGs at the Goal level can use IRIS+ to identify relevant Core Metrics Sets they can adopt to track and manage impact performance toward those goals. The IRIS+ system includes Impact Categories, Impact Themes, and Strategic Goals. Impact Categories within the IRIS+ system are aligned with the industry classes standardized by the International Standard Industrial Classification of All Economic Activities (ISIC). Impact Themes classify the types of Strategic Goals or approaches investors or enterprises may employ to achieve the primary social or environmental effects they intend to deliver. Strategic Goals are common strategies deployed by impact investors to achieve established social or environmental impact objectives within generally accepted Impact Categories and Impact Themes. The relationships among IRIS+ Impact Categories, Impact Themes, Strategic Goals, and Core Metrics Sets are illustrated in Figure 3. As investors increasingly use the SDGs to frame their activities, alignment of IRIS+ with the SDGs at the Goal level allows investors to use IRIS+ to discover SDG-relevant Core Metrics Sets. IRIS+ offers a growing list of Core Metrics Sets, with 31 Core Metrics Sets aligning to the SDGs at Goal level and 70 SDG targets aligning with a set of IRIS metrics.