A question – why should you care about the intersection of evaluation, impact investing, and public policy? I am John Sherman and as a long-time evaluator interested in scaling social impact, the answer to this question is personal and professional. As my colleagues- Veronica Olazabal, Jane Reisman, and Deborah Rugg– and I explored at our 2020 AEA Presidential strand session, the answer should be compelling to all of us.
Consider for a moment that roughly 10 percent of the world’s $240 trillion in financial assets are being invested either actively or passively to ensure positive social or environmental impacts. Compare this impact investing figure to the $77 billion US foundations gave away in 2018 (Giving USA 2019) only some of which focuses on social and environmental issues. As a community, we spend an enormous amount of our collective time, skills, and resources focused on the social and environmental impacts of the philanthropic community’s charitable investments, and on government programs. If we are serious about our roles, then we need to pay much more attention to the finance sector.
And we are more than ever. As Veronica pointed out in our session, over the past decade the evaluation community has pushed its way a seat at the impact investing table, contributing to the conversations and, as importantly, shaping the menu in many venues – The Global Impact Investors Network, the Impact Management Project, International Finance Corporation, the World Economic Forum, and the Organization for Economic Cooperation and Development.
Yet, most efforts to identify, track, monitor and evaluate social and environmental impacts are voluntary. While based on thoughtful principles, best practices, and even an emerging set of norms, the fact remains that for the most part whether any investment is evaluated for impact is up to the investor. The evaluative issues of the validity and assurance of data, findings and analyses; of community as stakeholder in contributing to what is materially important to measure (and how it is measured, and what to do with the results…useful feedback!) and report; and, transparency remain in the hands of the investors and the companies in which they invest.
An important, albeit not sole, venue to address these shortcomings is through public policies. Other countries and regions of the worlds are ahead of the U.S (e.g. the European Union, and many Asian countries). Here in the US, there are several emerging policy efforts at policy (e.g. B Corp and Pacific Community Ventures). While important efforts, the evaluative frame (our frame!) remains under-served in them and in others.
As Deborah Rugg eloquently states, evaluation is a citizen’s right. We need to help exercise that right, to hew to AEA’s Guiding Principles especially Respect for People, and Common Good and Equity and professional practice to “promote social justice and the public good.”
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