Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
over time (will soon be in its third version) and efforts have been made to reduce the number of questions
(above 100). Since the main goal is to profile companies, financial information is very scarce (only
includes one variable on total revenue), which would be important for the purposes of estimating SII
demand. Also, the focus is on for-profit organisations, so, again, it might not fully cover what is
understood as SII (e.g. including NPIs; Cooperatives). CASE i3 has also commissioned research in 2012 to
investigate the benefits of being labelled as a B-corp (this research is still ongoing). With this respect, the
challenge is to have an unbiased and representative sample of B-corps and non-B-corps so that robust
comparisons can be made.
6.53 The survey on the supply side provides information on fund performance that can then be linked
to portfolio company data. The objective is to provide input for the GIIRS rating system that rates both
funds and portfolio companies. The ratings do not result from financial performance but rather focus on the
(potential) for social\environmental impact. The underlying survey and quality check procedures used in
GIIRS follow the same structure as those used for B-corp but the survey questions and type of information
requested is adapted to serve the rating purposes. The data reporting burden is shared between the fund and
portfolio companies as both benefit from being rated.
6.54 Surveys are extremely resource intensive and entail significant challenges in terms of identifying
appropriate samples. Population and sampling issues are discussed at length in Section 6.6. Developing a
resource-efficient way to exhaustively map the SII market remains a challenge.
6.55 Scoping exercises and pilot surveys can provide valuable input to improving SII survey design.
However, new survey initiatives should be made in collaboration with existing efforts, to build upon
existing experience as well as avoid survey fatigue. This is particularly relevant at early stages of market
development, when different organisations may end up collecting data simultaneously. To collect globally,
cross-country comparable data, new survey instruments may be needed, but should be implemented in
partnership with existing initiatives and provide a broader coverage of SII activity across countries.
6.56 Different data approaches might be more appropriate to size different parts of the SII market
given its current embryonic state. For the demand side, bottom-up approaches that rely on some form of
SII-related legal form or classification might be preferable; however, for investors a top-down approach
could be sufficiently informative. However, surveys appear to be the best overall option at the moment —
despite high costs, sampling issues and survey fatigue risks — since not much information on SII is
available.
6.5. Current SII data and market estimation
6.57 The SII market and concepts are new in most countries, thus the evidence base is very scarce.
Market estimates mainly come from industry reports, while some academics have focused on measuring
the scope of SII activity. This process has been facilitated by the work of the National Advisory Boards set
up by the Social Impact Investment Taskforce established by the G8 and new initiatives such as Expert
Group on Social Entrepreneurship in EU or the CASE i3 in the US have helped building the evidence base
and pushing forward the data discussion. 29
29. Information on the Expert Group on Social Entrepreneurship can be found at:
http://ec.europa.eu/internal_market/social_business/expert-group/index_en.htm
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