USING B ANALYTICS AND GIIRS: How do Investors Measure, Benchmark, and Understand

Impact?

Date: Thursday 15 April 2014, 11:00 13:00, 14:00 16:00
Session reporter: Faith Bogue

Moderator: Phoebe Leung

Panelists:
(Part 1)
Scott Lawson, Kevin Vichyastit, Mona Kachhwaha
(Part 2)
Joan Shang, Mervin Teo, Fernanda Lima

Context:

As impact investors, what social and environmental issues do you care about? How do you articulate
the impact of your portfolio? How do you collect meaningful data to benchmark and understand
impact and report to your stakeholders? This workshop brings together a panel of leading impact
investors to discuss how their impact measurement strategies has evolved. They will discussed how
they have moved towards harmonized, comparable impact metrics and how the B Analytics platform
and the Global Impact Investing Rating System (GIIRS) are serving their needs. Join this discussion
to share your thoughts and questions about impact measurement and see a brief demo of B
Analytics.

Summary:

B Lab is a nonprofit organization from the United States. They have three main initiatives: to measure
what matters, to maintain their mission, and to drive capital to impact. To address these, they created
B Impact Assessment, B Corp Certification, and B Analytics/ GIIRS, respectively. B Lab found that it
is difficult to measure an investments impact on society and the environment, and that it is difficult to
define impact. The market asked for: a common data platform, customizable data collection,
benchmarking, and improvement in reporting.

Investors value efficiency. They also wanted customizable metrics, as each investor has different
theories of what change and impact mean to them. They also want to benchmark so they can see
how their investments are doing compared to their peers investments. So B Lab launched B Analytics
so investors can more easily conduct due diligence, collect standardized data, and have access to
data about more diversified companies. GIIRS has, since its inception, rated over 1400 companies
and 62 impact funds. Now investors have tools to choose companies to invest in, and then see how
their investments have improved that company.


Mona Kachhwaha

Mona is the Director of Investments at Caspian Advisors India. They have had 3 funds over a period
of 9 years, and they work in financial inclusion. Her company uses GIIRS. They were a part of B Labs
beta testing period, so the initial phase was enormously difficult, hard to implement, and a drain of
time and resources. However, now that everything is streamlined and officially launched, they use it
throughout their portfolio, and have converted the companies they work with to accept and enjoy
using GIIRS as well.



Mona mentioned her company uses both internal and external tools to assess impact. Their final
social performance rating report is a combination of quantitative and qualitative assessment,
performed both by GIIRS and by themselves. It is difficult to measure social impact since a lot of the
social side is hard to measure, but GIIRS has helped give them a common platform and firm metrics
to start with.

Kevin Vichyastit

Kevin is an Investment Associate at LeapFrog Investments. LeapFrog is currently working on its
second fund, which is currently at $200 million. They work in Africa, Southeast Asia, and India.

LeapFrog never openly defined impact, but they did have clear goals on how many people they
wanted to help. They view financial inclusion as a good first step metric. Though its not a perfect
metric, it does usually indicate a better way of life. LeapFrog initially used standardized metrics as
defined by the market, and then they created their own metric system called FIIRM. The problem with
FIIRM is that it could only compare between companies within their own portfolio, so they adopted
GIIRS so they can assess their impact across a broader set of companies. Kevin said that they now
use lots of different assessment tools, including GIIRS, and that these assessments are all helping to
create an ecosystem, and a dialogue about best practices.

Scott Lawson

Scott is the Chief Executive Officer at SOW (Asia) Foundation. His foundation is a start-up in Hong
Kong, which is a very nascent investment space. Scott gave an example of a company hes working
with called HK Recycles. After investing (and taking a majority stake) in that company, they have
increased their customer base from 250 customers to 1500 customers in 6 months.

When asked how he defines impact, Scott questioned whether impact is the ultimate measure, and
stressed that financial sustainability of an organization is also important. He fears that as social
enterprises continue to fail for financial reasons, that it is creating cynicism about the space as a
whole. However, he believes each organization defines their own impact differently, so they look at
each potential investment individually, evaluate their business model, and are very involved. His
foundation uses a more customized approach. He uses B Analytics/ GIIRS as a way of helping
organizations to become more investment ready. He believes onerous measurements are a waste of
time and resources for NPOs, so a standardized approach saves time.

Joan Shang

Joan is a Project Associate at RS Group. They have adopted a total portfolio approach in which they
use both grants and investments. They are focused on a climate change strategy. RS Group has
invested in 4 impact funds, 3 of which have used the GIIRS rating system. Its a far easier way of
aggregating data.

RS Group has a manager review every year: to help assess impact, make sure the organizations
missions are still aligned with RS Group, and to remind them that investors are paying attention.
GIIRS is helpful in that it means investors do not have to teach managers how to perform impact
assessments, and do not have to burden them with a multiplicity of different assessment tools, when
they could simply rely on one. They want the organizations they work with to see assessment as a
value rather than an irksome task.

Fernanda Lima

Fernanda is the Director of Private Equity at Developing World Markets (DWP). DWP structures
transactions that provide microfinance institutions and other socially motivated organizations with


access to international capital markets. They aim to achieve sustainable development through
market-level financial returns for our investors and social returns in the developing world.

DWP started their own rating system that predates B Lab. While financial returns are clear, assessing
impact is more difficult. They conduct client surveys to measure responses, and look to see if a
company is well governed, with a strong mission, vision, and impact in the community. While they
originally had their own rating system, they started using GIIRS as they saw it as an endeavour that
was doing what they were already doing, but with a higher level of rigor. Their initial ratings continue
to serves as internal benchmarks.

Mervin Teo

Mervin is an Associate with Quadria Capital. They are a traditional investment fund (a double bottom
line fund) and they only invest in healthcare. They work in India and Southeast Asia, with offices in
Singapore and India. His company recently invested in a hospital chain in Calcutta. They use a hub
and spoke strategy, with a hub hospital in the city, and village hospitals surrounding the city. They are
very new to B Analytics.

Quadria Capital looks for certain benchmarks before investing in health care quality, affordability,
and accessibility. They have helped to create defined KPIs and timelines for the companies they work
with, however they noticed that social investment is growing in Asia, and felt it made sense to get on
board with an official reporting and metrics system.


Questions:

Does B Lab have any competition out there? Why should we trust them specifically?
It is not perfect, but its the closest weve gotten to a global standard, and theres so much
customization available that almost any company or investor can make it work for them and
how they define change and impact. Theres a balance between creating the standard and
meeting businesses where they are. B Lab has constant feedback loops, regular working
groups, etc., so its a rather dynamic rather than static process. They are also working to
develop more industry specific measurements.

What is the level of maturity in the field?
Its very new. There is some risk in using B Lab business and investors see the importance
of it, but its still theoretical in a lot of places, so theres a lack of both awareness and demand.
The market is even smaller in Asia, with only one employee working to grow the space.

What is the purpose of the data after collection? Can you use it internally?
Its helpful for nonprofits to see their own progress and growth, and it is helpful for other
companies to get a sense of what they can improve internally based on critiques of their
peers.

What are the costs of measurement? Who bears the cost?
The answers to this question were really varied. Some have researchers that a part of the
investment firm, and they take it upon themselves to gather these metrics. Some said that a
portion of the investment is designated for this cost. And other said the nonprofits need to
bear the cost themselves.

If you are choosing these metrics, they will become the standard. Standards are good because
theyre something to strive for, and bad because it holds all organizations, as varied as they are, to


one global standard, which may be unfair and lead organizations to strive to get a higher rating rather
than working to improve their impact. How will you combat this?
Constant feedback. The answers and metrics are not static, and they are open to hearing
complaints from everyone involved.


Key Points:
The social investment space in Asia is still very nascent
B Lab has created a way of aggregating mass data, and standardizing impact metrics and
assessment, leading to safer and easier investments.
However, the space is still very new and B Lab is still quite young, so they are constantly
receiving feedback, growing, and improving. It is not perfect, but a step in the right direction.