By Ken Mehlman, Elizabeth Seeger Apr 12, 2019
KKR Global Impact became a founding signatory to the IFC Principles on April 12, 2019 at a signing ceremony in Washington, D.C.
We often get asked how we think about and approach impact investing, particularly as it relates to impact measurement and management. It’s a good question.
While the impact investing community has made great strides over the years — with recent studies estimating the size of the market at $502 billion1 with the potential to grow to as much as $26 trillion2 — there continues to be a difference of opinion on the best way to enable and encourage the flow of capital to today’s biggest social and environmental challenges. Given their scope, it’s clear that the biggest and most important problems need everyone’s involvement and contribution to address. When each of us— using our particular skills and knowledge and perspectives— come together, we can most effectively make progress.
So when we began developing our impact strategy, we intentionally sought to learn from existing efforts and build our approach through collaboration with and learning from industry leaders. Collaboration and learning from others has always been key to our work, such as becoming a signatory of the UN-supported Principles for Responsible Investment in 2009 and the multiple partnerships we have built since then, such as with BSR, our non-profit partner for KKR Global Impact. It is in this spirit of learning so we might continually improve that we are now aligning with the work of the International Finance Corporation (IFC).
The IFC, along with a number of other organizations, recognized that different approaches and definitions could create confusion in the marketplace and slow the movement of capital to the impact space. To help provide a solution to this problem and encourage a “race to the top,” the IFC drafted nine key principles for impact management to create a “market standard for impact investing” and to “bring greater transparency, credibility, and discipline to the impact investing market.”
Today, we are proud to support these efforts of alignment by becoming a founding signatory to the IFC Principles and committing that our future investments for impact will seek to adhere to the Principles. We join 59 other signatories collectively representing over $350 billion in assets invested for impact in what is an important step for this movement.
While the IFC does not require signatories to disclose exactly how they are currently aligned with each of the Principles for a full year, we thought it would be a helpful exercise to evaluate where we are today—at the beginning of our journey—and where we may want to improve upon our approach.
So, we asked Tideline, an impact strategy advisory firm, to conduct an informal review of our impact management system to see how we stack up against the IFC Principles. Over the coming year, we intend to share more about this evaluation, and how we intend to measure and communicate our impact in alignment with the Principles, based on the lessons we have learned from this exercise.
We recognize that best practices in impact management are a moving target as we all learn collectively, and we are committed to partnering with our fellow signatories, our portfolio companies, our investors, and the impact investing community at large to help shape and define this market.