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Impact report 2021 →

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Impact report 2021 →

Category: Impact methodology

Methodology

Part A

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Part B

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Part C

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Part D

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Part A Approach

Part A

Just as the investment thesis is unique to each Incofin fund, so is the impact thesis. A fund-specific impact thesis is designed to provide:

clarity on assessing whether the potential investment has social impact
transparency between the Investment Manager and Investment Committee
ease of application via a pre-defined impact thesis framework.

Each unique fund-specific impact thesis assesses:

INTENT … for genuine impact and alignment to good SPM practices
WHO … is targeted as the end customer
WHAT … benefits the services provide
HOW … the investee provides its services.

Approach Part B

Part B

The social, environmental performancemanagement of the institution is assessed and monitored via 4 tools, of which 2 have been developed in house:

Agriculture POs: ECHOS-AgPO© (Incofin)
Agriculture SMEs: ECHOS-AgSME© (Incofin)
Microfinance: SPI4-Alinus (Cerise)
Other Sectors: Social Business Scorecard (Cerise).

Each tool has a minimum cut-off score, showing our commitment to promoting responsible and impactful businesses only.

Incofin has a strong history of leading efforts in social audits:

2006: Incofin develops one of the first social & environmental performance audit tools for due diligence, for the microfinance sector
2010: Incofin is a founding member of the Social Performance Taskforce and co-chairs social investor working group
2011: Incofin endorsed the Principles for Responsible Investment (PRI)
2012: Incofin develops social & environmental performance audit tools for agriculture sector
2012: Incofin contributes to the development of the Universal Standards for social performance
2013: Incofin leads the social investor efforts for the development of an investor friendly version of SPI4 (SPI4-Alinus)
2014: Incofin is re-elected to co-chair the social investor working group within the Social Performance Taskforce
2015: Incofin includes proactive implementation of Client Protection Principles as an undertaking in all loan agreements
2017: Enhanced Incofin internal social & environmental performance audit tools to be aligned to the UN SDGs

Part C Approach

Part C

Once Incofin decides to invest in an institution, output indicators at the level of the end clients are tracked throughout the life of the investment, showing Incofin’s commitment to measure the outcome of its investmentat both fund and investee level.

Some of the areas measured and tracked include but are not limited to:

New customers obtaining access to financial products
Additional credit to smallholder farmers and SMEs
Increase in agricultural production
Employment of females in the workforce
Training and delivery of programs.

Indicators are specific to each fund and in the case of equity investments, investees also. The indicators identified include those that not only promote SPM practices but also impact to the end customer.

Approach Part D

Part D

During the exit process, the fitness and compatibility of a potential new partner for our portfolio clients is taken seriously. Factors taken into consideration include but are not limited to:

reputation in the market
stability of leadership
sector experience
commitment to social performance
rationale for investment
cultural fit.

Watch our video on the responsible exit from AMK, Cambodia

Read about our responsible exit from AMK, Cambodia