We define our impact as the outputs, short-term outcomes, long-term outcomes, and other effects we, and the borrowers we work with, have on our various stakeholder communities.

Measuring this impact is an important way for us to assess our progress in carrying out our mission, identify opportunities for improvement, and understand the social and environmental returns on our investments. We know that the better we can measure our impact, the better we can maximize it.

Impact measurement framework

Our mission is rooted in channeling capital to organizations that are working towards a more equitable and sustainable world. To channel that capital, we offer our Community Investment Note® (Note) to both accredited and retail investors. With that capital we invest in high-impact financial intermediaries, projects, and funds that are financing social and environmental efforts in markets that are left out of mainstream or traditional financing. We also offer investment services, such as our Syndication work, that provide alternative avenues for raising and deploying capital for impact.

The work is a multi-step process, and as such requires us to understand how we are achieving impact at each step of the way. Are we effectively aggregating capital from investors? Are we helping to grow the pool of investors? How are our investments supporting our borrowers? How are our borrowers serving their target communities? Our list of impact questions goes on.

We’ve synthesized this work, and thus, our impact, into three dimensions: 

• Investor impact
• Portfolio impact
• Community impact

Each dimension reflects a different stream of outputs and outcomes in relation to its intention. In this way they are distinct, but collectively contribute to our one overarching mission. 

Methodology

Calvert Impact Capital is a founding Signatory to the Operating Principles for Impact Management, a framework spearheaded at the IFC and adopted by more than 90 leading global impact investors. The Principles aim to ensure that impact considerations are integrated into the entire investment lifecycle, from deal sourcing to exit or repayment, and that lessons learned are continuously incorporated into portfolio management. As a Signatory, we commit to disclosing our impact management practices and their alignment to the Principles on an annual basis starting in April 2020.

To see how our impact measurement and management practices align to the Principles, read our Impact Management Disclosure Statement.

Our Impact Management Practice methodology is defined by our 3 layers of impact.

Investor impact

Investors play an essential role in growing the impact investing movement and channeling capital to mission-oriented organizations. We aim to grow both the amount of investor capital and number of unique investors by offering our Note and other investment services that are accessible to accredited and retail investors. The Note provides an efficient gateway for investor capital, through its widespread availability, strong track record, and ease of use. By maintaining and increasing this efficiency, we seek to attract more investor capital for impact. To evaluate this, we measure the outputs and outcomes our work has on our community investors, collecting both quantitative and qualitative data.

Metrics on Note sales reflect data from our online investment platform, direct Note sales, and brokerage firms that offer our Note. Data from sales through brokerage firms is provided by our Note distributor. Due to limited individual account information from Note sales through brokerage firms, not all Note metrics will include brokerage channel sales data. Information on financial advisors is self-reported and stored internally on an ongoing basis. Data is gathered and assessed on a quarterly and annual basis.

Portfolio impact

Our portfolio work focuses on providing capital and services to mission-oriented organizations that are left out of traditional capital markets. Through our investments, we seek to mobilize effective intermediary capital to provide financing solutions to address the social and environmental problems that they focus on. We tailor our support specific to the borrowers’ needs so that they can either build, grow, or sustain their operations, and ultimately the impact they have on the communities they serve. We define this value by the “additionality”, that is, the degree to which our investments are increasing the quantity and/or quality of our borrowers’ outcomes beyond what otherwise would have occurred. Based on our understanding of additionality we can measure the unique impact of our financing.

These outcomes can vary by type and can overlap, but all reflect a common theme of increased capacity. For example, our investments can help provide validation that attracts additional investor capital, de-risk new business models, and influence market behavior. Such outcomes can be challenging to measure in purely quantitative methods. However, through anecdotal reporting from the borrowers in our portfolio, over time we can gather and analyze qualitative data that demonstrates the outcomes they are experiencing with the help of our financing.

Data from our portfolio is gathered and assessed on a quarterly and annual basis. Outputs are measured as they occur and outcomes result from investment relationships that have built up over many years and as such are recorded on an ongoing basis.

Enterprise impact

We define enterprise impact by assessing the outputs and outcomes that the borrowers in our portfolio have on the communities in which they work. Outputs are reported as the products and services produced by the borrower itself and outcomes are the effects of these outputs on the end-clients being served. These outputs and outcomes are both social and environmental, which we have broken down based on our theories of change for each of our nine impact sectors: affordable housing, community development, education, environmental sustainability, health, microfinance, renewable energy, small business, and sustainable agriculture. For each of these sectors we have determined relevant key indicators that are self-reported by the borrowers, and that we have assessed as instrumental for ensuring our investments are in line with our mission.

These indicators align with industry practices and peers, including (but not limited to):

• Impact Reporting and Investment Standards (IRIS)
• Impact Managament Project (IMP) Dimensions of Impact
• The CDFI Fund
• The Department of Housing and Urban Development
• Aeris
• SPI4
• Social Performance for Microfinance
• Global Off-Grid Lighting Association (GOGLA)
• The Aspen Network of Development Entrepreneurs (ANDE) 
• The Finance Alliance for Sustainable Trade (FAST)

We gather data from our borrowers on an annual basis based on performance for their last fiscal year. We ask all borrowers in our portfolio to provide us with impact data. We strive for a 100% response rate, however there are instances in which borrowers may not fit our reporting requirements.

These requirements are:

• Output indicators are attributable to investments made by the client during the year under review
• Client has at least one active loan with Calvert Impact Capital during the year in which we are measuring and reporting impact
• All active loans to the client are performing in line with its loan terms

Instances of non-reporting from our borrowers are very rare, as we work with each of our borrowers to tailor the metrics reported specifically to their unique operations, while still striving to maintain industry-standard indicators. In the past two years of impact reporting over 90% of our portfolio reported to us.

Check out our latest impact report to see our impact results.