Access to energy, job creation and environmental benefits were the most important factors for measuring impact investments, according to 13 clean energy investors surveyed in a Global Impact Investor Network (GIIN) report.
The GIIN, a non-profit organisation that works to encourage the impact investing industry, released a report this week, Impact Investing in the Clean Energy Sector, to help investors understand how to measure the social and environmental performance of investments in clean energy.
“We aim to bring greater transparency to the diversity and limitations of current impact measurement approaches,” the report stated. “Once investors decide what metrics to use, the question turns to how to measure them.”
GIIN surveyed 13 of its members, who are clean energy investors from fund managers and development finance institutions (DFI), foundations and banks. The companies surveyed are Acumen, Bamboo Finance, Gray Ghost Ventures, responsAbility, DOEN Foundation, Global Alliance for Clean Cookstoves, LGT VP, Lundin Foundation, Calvert Foundation, Shell Foundation, Deutsche Bank, FMO and Overseas Private Investment Corporation.
The metrics used to measure impact investments range from energy access, job creation and environmental benefits to investor leverage, cost savings and health benefits. The only metric to receive unanimous support was the number of beneficiaries for access to energy.
Eleven of the respondents thought job creation was an important measuring tool for impact investments.
Investing in the reduction of greenhouse gas emissions was another metric that received almost complete support, with ten organisations citing it as important. However, getting an accurate estimate of emissions in the field can be difficult and is influenced by numerous factors.
There were two metrics which interested the direct investors and foundations surveyed, but DFIs or banks did not seem concerned. The latter found cost savings resulting from shifts in fuel spending unimportant, and only Deutsche Bank said enhanced opportunities for income generation was vital.
The two least supported metrics were investments that supported or empowered women and investments that provided health benefits. These metrics did not receive any votes from direct investors and had varying support among DFIs, banks and foundations.