Social, Environmental & Financial Metrics
Supporting the Adoption of Reporting Standards
An emerging taxonomy of metrics and indicator terms is currently available through Impact Reporting and Investment Standards IRIS. Similar to the role the International Financial Reporting Standards plays for traditional capital markets, IRIS creates a common language for measuring, reporting, and comparing the social and environmental impact of various organizations.
Companies can report metrics to IRIS via specially configured Excel spreadsheets. Other input methods are currently being tested. Mission Markets strongly encourages issuers to select applicable metrics contained within IRIS for their metrics reporting requirements.
A newly developing complimentary tool is the Global Impact Investing Ratings System GIIRS. Similar to Morningstar or the Standard & Poor’s credit risk ratings for traditional capital markets, GIIRS will be able to rate the social and environmental impact of a range of companies, organizations, funds, and projects. GIIRS will allow comparison of impact across products, industries, sizes, and focus, thus greatly advancing the ability to evaluate and manage investment portfolios.
Once GIIRS is launched, Mission Markets is likely to require issuers to utilize this ratings tool if another third party rating system does not currently exist for a sector. In the interim while GIIRS is being developed, Mission Markets will request issuers to complete the B-Survey if they do not have documented ratings as listed in our Minimum Listing Requirements.
For the environmental issuers and organizations, there is a wide range of metrics and certification systems. The Minimum Listing Requirements are sector specific. One key metric service that has partnered with Mission Markets is Trucost. Trucost provides both in depth environmental reporting as well as a basic level or “Rapid Environmental Assessment”. Another environmental metric that is being developed is the Ecosystem Services Benchmark. Once this metric is launched, Mission Markets will develop a tool to facilitate its use.
The ability of companies and organizations to effectively report impact metrics will positively impact their chances of financing on Mission Market. Impact Investors are requiring issuers to provide clear indicators/measures of their social and environmental impact.
With the data generated by the ratings organizations and through connections to larger databases, Mission Markets can offer investor members an unprecedented opportunity to access reporting and ratings data for impact investment decision-making.
Social, Environmental and Financial Metrics
One of the major challenges for the evolving impact investing industry is the measurement and assessment of social and environmental impacts. There are a number of organizations working to standardize and improve reporting of social and environmental impact metrics. Mission Markets strongly supports these initiatives and will require issuers to use applicable reporting metrics and ratings systems as they become available and adopted/accepted.
All organizations or projects seeking capital through the Mission Markets platform must meet our Minimum Listing Requirements:
Offering Documentation
- Either (a) Private Placement Memorandum OR (b) Term Sheet + Executive Summary
- Engagement letter from attorney or broker dealer
Financial Disclosures
- Established organizations must provide ONE of the following (minimum of two fiscal years): (a) audited financial statements (b) unaudited financial statements OR (c) IRS tax form
- Pro-forma projections for five years (recommended) or two years (minimum)
Social and Environmental Impact
- Provide documentation and results of ONE third party Assessment, Rating, or Certification (ARC) for the organization, project, or offering. Agree to annual updates of your ARC (where applicable). See Mission Markets’ accepted third party list of MM Private Capital ARCs.
Additional Checklist for Information Requested by Mission Markets
- Investor presentation (Powerpoint or video or both)
- For investment fund managers - three examples of previous investments
Mission Markets is creating capabilities that will allow users to more effectively access and integrate a variety of metrics and reporting tools into their investment decision making and portfolio management processes.
Benefits and functionality include:
- A single entry point for the identification, evaluation, investment, and performance tracking of impact investment opportunities
- The ability to compare financial, social, and environmental performance within and across industries
- Access to newly developing performance standards and indices
- Reducing the amount of time needed to conduct due diligence on impact investment opportunities
- Sharing best practices with a community of like-minded investors and other organizations