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How Can Investors Evaluate Impact Across Different Kinds of Investments?

JTC presents a new way of looking at impact reporting with comprehensive data analysis

Today’s investors have plenty of choice when it comes to financial products and investment vehicles, and many are looking to put their money toward achieving good, whether their focus is the environment, inequality, or social justice. Investment funds dedicated to impact are proving to deliver better returns on average than those that are not, and experts say the U.S. is primed to experience an influx in impact investment during the Biden Administration, so funds that provide a meaningful environmental and social impact will be more valuable than ever.

But how can investors evaluate which funds are truly walking the walk as opposed to just talking the talk, and how do you position your fund to take advantage of this rapidly-expanding marketplace? At JTC, we’ve been thinking about this a lot, and are focused on bringing cutting-edge solutions to more sectors than ever before.

Today’s investors want more information than in the past because they’ve become jaded by “greenwashing,” token environmental initiatives that only exist for public relations purposes. They want to see real results, and firms that can show them those results will have a major leg up when it comes to acquiring capital. So how do you prove to investors that you’re really making an impact?

It’s difficult for funds to demonstrate which projects are making a sincere impact because “impact” is a somewhat fluid concept, and different investors have different definitions of success. One set of stakeholders might place a priority on job creation; another on reducing their carbon footprint; and yet another on increasing the supply of affordable housing. Different priorities require different metrics.

If one project aims to utilize renewable energy, while another aims to develop multifamily housing and create jobs in a Qualified Opportunity Zone, how do you compare the two?

To start with, you have to accurately track and report all relevant data. JTC takes a holistic approach and offers solutions that include a combination of technology, world-class client services, and domain expertise that are custom-built for the needs of the parties involved. Whether we’re working with corporations, investors, or fund managers, we have purpose-built solutions for impact tracking.

The second thing you need is a methodology for comparing different types of investments. JTC has collaborated with impact investing thought leaders like Howard W. Buffett to incorporate best-in-class solutions like iRR, or impact Rate of Return, which helps compare impact between disparate investment opportunities.

The third thing you need? The ability to organize all this data. You have to comply with ever-changing regulations and laws, and you need to prove to investors that you’re succeeding. For example, ESG reporting requirements are always evolving and vary across jurisdictions, and following them may mean the difference between an investment qualifying for certain incentives or not. JTC’s platform has advanced reporting and compliance procedures to help you stay on top of those duties, regardless of your fund’s size or growth plans.

Our goal is for our clients to be able to differentiate themselves in the marketplace, allowing them to raise and deploy capital faster and produce better results. At JTC, our clients aren’t just talking about making an impact, but are actually able to prove that they’re doing it.

Download our Measuring Impact Investments Factsheet!