About Impact Investment Group
Impact Investment Group Pty Ltd (IIG) is a leading Australian impact investment funds manager and co-investor.
Our mission is to shift capital towards investments that blend financial returns with deep social and environmental impact, and to lead by example in using all of our resources to create the world we want to live in.
What we do
IIG provides investment opportunities in commercial real estate, renewable energy infrastructure and venture capital. These are available to wholesale investors as defined in the Corporations Act (cth) and target market-rate financial returns in combination with significant environmental and social benefits. The company has also established a foundation, funded through its management fees and profits, to deploy capital for impact-first investments, traditional philanthropy and venture philanthropy. IIG regularly reports to investors on its financial, environmental and social performance. IIG and its related entities co-invest in each of the wholesale investor syndicates managed by the company.
Our Growth, Size, Experience and Clients
The company was founded in 2013 and made its first acquisition, a $5.25 million real estate investment, in June that year. As of December 2017, IIG had more than $730 million in assets under management (including assets under development) across its three primary business classes. It employs more than 30 people, with offices in St Kilda, Melbourne, and Surry Hills, Sydney. The company’s management team has extensive experience working as executives in some of Australia’s, and the world’s, leading wealth management, finance, property, and renewable energy organisations. IIG’s clients include high net worth individuals, self-managed superannuation funds, family offices, foundations and institutional investors.
Our Memberships and Relationships
IIG, as one of Australia’s first certified B Corporations, believes in using the power of business to drive positive social and environmental change. It has met high standards of transparency, governance and accountability, as assessed by the B Lab international standards committee. IIG aims to play an active and leading role in Australia’s public conversations about responsible investing and impact investing. The company is a member of the Responsible Investment Association of Australasia and the Global Impact Investing Network.
- We courageously stand up for what we believe
Whether it is about climate change, or the way we behave with each other – we own our talk to action ration. And there’s no other time than now.
Where others think taking a stand is too great a risk, we think the risk is greater in staying silent or doing nothing.
We are unwavering in being the change we seek (especially as a B Corp!).
We will help steer each other back on course if we get off track.
- We love to try new things
We are here to disrupt business as usual and so we should all learn to become artists and inventors.
Search for the opportunities and the white space, rather than being disheartened by the challenges.
Say "yes... and", rather than "no".
Experimentation, not perfection, will get us where we want to go.
- We earn your trust by being open and honest
Expect us to under promise and over deliver.
If we are going to have meaningful and deep relationships, we need to be straight with each other from the get-go.
We’ll always tell you what we’re really thinking.
- We are driven by enlightened hospitality
Relationships are at the centre of our business and our theory of change.
We believe that enlightened hospitality is contagious.
Exceed expectations of service, compassion and kindness, and let people know we’re on their side.
- We play the long game
Since our purpose is to serve something greater than ourselves, it is crucial that we never compromise the end game for the short term.
We will always determine our course of action based on what’s right for the planet, our community, and the business, not on expediency.
Act in the interim as you expect to act in the long haul.
- We are one piece in the puzzle
Although we are proud of our work and deeply believe in our values, we know that we are just a small part of the solution, and that our part cannot solve everything.
Our humility reminds us that there is so much we still have to learn. There is also a limit to what money can solve – and indeed some things should be protected from market forces.
- We can have our cake and eat it too, and share it with each other
In our business, it is not a zero sum game, where our success is someone else’s loss.
Our success means that our investors do well, the community does well, and the environment is nourished. A true win-win scenario.
Our Impact Themes
- Land use
- Place and vitality
- Health and wellbeing
Our Approach To Impact
IIG’s approach to impact is designed and intended to screen, manage and measure impact, in a systematic way across all our current asset classes.
As a business that grows and evolves, our approach, tools and processes are not static. This approach to impact was developed during the 2017 financial year, and its implementation started. We continue to refine and tools and processes intended to help us:
- Standardise impact screening regarding new investment opportunities within each asset class;
- Develop impact strategies for assets that require our direct management to achieve their impact potential (these assets include commercial real estate with significant redevelopment or upgrade potential);
- Formulate theories of change for each portfolio and each asset; and
- Streamline the collection and aggregation of impact indicators across the entire business.
Our impact screens generally assess three aspects of a potential investment, namely:
- Capacity to create impact
This incorporates the capability and inclination of the project proponents to create impactful outcomes, considering their values, track-record, and mandate practices. In the case of commercial real estate, the main tenants are important stakeholders.
- Direct impact
This identifies the primary and secondary impacts we could expect to be delivered via the development and operations of an asset (or investment). A primary impact may be greenhouse gas abatement via a solar farm, while the secondary impacts of that same solar farm may be increased biodiversity of the area through its support of a local habitat restoration project.
- Wider benefit to society
This identifies the broader benefits that could accrue to society. Examples are those created through direct spending and recirculation, local value creation, advocacy and knowledge sharing.
Impact for Directly Managed Assets
For real assets that offer potential for increased value through our development, redevelopment or restoration, we develop commercially-grounded impact strategies. Our process to develop these strategies has two stages:
- Analysing the context
We identify and understand the challenges and opportunities that we can address via our management of the asset. We engage with the key stakeholders and potential beneficiaries, such as local and state government, potential tenants, third sector organisations and local residents and businesses.
- Developing the approach
We identify the activities to be undertaken to respond to the challenges and opportunities. These form the basis of a theory of change for an actively managed investment.
Theories of Change, Measuring and Reporting Impact
To clarify how our investments will deliver impact, we develop a theory of change for each portfolio, as well as each of our investments.
A theory of change has three sequential elements: Activities, Outputs and Outcomes
Examples of activities are; building a solar farm, installing a grey water system, or investing in a carbon-neutral delivery company.
The corresponding examples of outputs would quantify the scale of the activities undertaken: the solar farm’s generation of clean energy, the grey water system’s production of reusable water, the reach of a carbon-neutral delivery company’s operations.
The outcomes are the benefits that the activities and outputs achieve. They would include; greenhouse gas emissions avoided, reduction in potable municipal water demand, and carbon equivalent emissions offset resulting from the carbon-neutral deliveries.
The breadth and depth of outputs and outcomes can be measured via indicators. These measurements can be compared to benchmarks and/or targets.
Implementing a theory of change, and measuring impact
We begin by identifying the main activities undertaken, and outputs produced, either by the investee or by us as the asset manager. We then define both primary and secondary impacts.To track our performance, we design custom impact indicators and draw upon broad industry standards such as the IRIS catalogue of generally-accepted performance metrics.
For specialised sectors, such as commercial real estate, we draw upon leading certification and rating standards. These include the National Australian Built Environment Rating System (NABERS) for Energy, Water and Indoor Environment Quality, the Green Building Council of Australia (GBCA) Performance ratings, and the international WELL Building Standard.
The theories of change are aligned to IIG’s ten themes of impact, and enable tracking and reporting of impact.
We report the impact indicators which comprise the Theory of Change to investors annually at a minimum.
Development of these tools and methods, tailored for each asset class, will continue throughout FY18.
We are investigating setting impact targets for our commercial real estate portfolio, utilising Science Based Targets for emissions reductions. We are also considering other sector-based tools available to compare performance against industry benchmarks. Finally, we are considering how to align our impact themes with the UN Sustainable Development Goals, so we can report against these in the future.