Tailoring Lens of Impact: Through Multi-stakeholder Conversations

During the concluding phase of our Sustainable Investing Research Consulting Project, we encountered a wide range of challenges. Our client, the Responsible Investment lead of an esteemed asset management firm based in Latin America, was ready to bring our tailormade metrics to the internal investment teams and begin the process of analyzing the positive contribution of their portfolio companies. Consequently, our team was more than excited to embark on this unprecedented journey with our client. 

Challenges While Navigating the Final Stretch

Following the metrics building and tailoring, our group entered the implementation phase, where we took the impact metrics for each vertical and performed data collection and analysis for the pilot companies that our client had previously picked out. We first met with the portfolio managers/executives within each vertical to explore the suitability of the potential portfolio companies. With their constant interactions with the portfolio, we were eager to hear their thoughts on the tailormade metrics and probe the areas of improvement. We also worked closely with our client’s external partner in charge of the ESG data collection. Upon discussion, we gained a much deeper understanding of the challenges that they face with gathering ESG-related data for the portfolio companies. As most of their investment is located in Latin America, where no current policies are in place for companies to report their ESG performance, it’s extremely difficult for our client to ask their portfolio to put in extra effort in measuring their impact. The good news is that this is the second year that our client has asked the portfolio to report, and progress was shown in the percentage of completion from this year to last year. On the other hand, most companies are not using third-party auditors, which creates many errors that cannot be explained when they report on the data platform. 

Another challenge our team faced during the last part of our project was managing our deadline with the client’s capabilities. As part of the project scoping process, we have created a Gantt chart to make sure we are aligned with checkpoints and deadlines both internally and with our point client. With a clear understanding and constant alignment, our team has faced no issues sticking with our expected schedule. However, as we entered the implementation stage and started interacting with our client’s colleagues and their clients, it was difficult to ask them for additional time to meet with us and provide feedback on our work. This phenomenon presented itself as a valuable lesson. We deepened our understanding of why our client always emphasized the importance of using the “financial” language to appeal to the portfolio managers. As a result, we filled our deliverables with content stressing the necessity of measuring the impact of investment. 

A Journey of Introspection 

Despite the array of challenges our team encountered over the past four months, it has proven to be a fascinating learning experience for us, as it broadened our understanding of impact management and measuring in the investing world. I was able to gain insights into the impact measurement frameworks and standards, industry terminology, and its future roadblocks. In addition, I have further strengthened the soft skills I carried with me from my past consulting experience by learning from my teammates and peers, including project management, compassion, and leadership. All of the significant lessons learned have contributed to my professional growth and equipped me with both the knowledge and skillsets to transition from the consulting world to the impact investing arena. I look forward to leveraging them upon graduation from SIPA and the Climate School.