Impact investments are investments made with the intention of generating measurable social and environmental benefits alongside a financial return. The Global Impact Investing Network (GIIN) has just published a fresh report “Sizing the Impact Investing Market” (2019) that indicates that since the term ‘impact investing’ was formally coined in 2007, the industry has grown rapidly, and continues to expand. It is estimated that over 1,340 organizations currently manage USD 502 billion in impact investing assets worldwide. In addition, one in four dollars of professionally managed assets (amounting to USD 13 trillion) now consider sustainability principles. These figures indicate that significant amount of capital is at work to address the world’s social and environmental challenges including those related to the UN Sustainable Development Goals (SDGs) and promoting sustainable forest management (SDG Goal 15). Very recently, GIIN published another report that demonstrates the good past performance and the potential to scale up impact investment in forestry.
Currently, the measurement and monitoring of impacts is being standardized and mainstreamed. IRIS+ has emerged as the leading accepted system for measuring, managing, and optimizing impact (https://iris.thegiin.org/), and provides also a general framework with metrics for assessing impacts in the forest sector. To ensure harmonization between impact investment indicators and Global Reporting Initiative‘s (GRI) Sustainability Reporting Guidelines, GRI and GIIN provide guidance on aggregating and comparing the standardized performance information.
Given the potential benefits for investors, improved metrics and emerging standards, SDGs are now gradually being mainstreamed in international investment and corporate sustainability contexts, including forestry investments and the work of Dasos Capital. The forest sector is in a strong position to influence the global response to many of the challenges that the SDGs aim to solve. GIIN’s research (2019) in forestry demonstrates favorable financial performance, a sustained track record, and a positive impact on carbon sequestration as well as several other environmental conservation benefits. In fact, investing in sustainable forestry, is about impact investing.
Timberland investment funds have emerged focusing on sustainable wood production sometimes complemented with provision of ecosystem services. These funds are also increasingly interested in monitoring and reporting their development impacts using various metrics, often integrated into their sustainability reporting. Starting in 2019, Dasos has started to report on its contribution to the core SDG-based indicators and above- mentioned metrics that capture tangible and sustainable impacts on the economy, the environment and society. SDG reporting is meant to inform current and possible future investors, who want sustainable investment targets that align with their investment strategies and indicators and create value while controlling environmental and social risks.
As part of Dasos SDG annual reporting and as a response to the emergence of climate change as one of the most crucial challenges facing the mankind, Dasos has strengthened reporting on the funds’ carbon footprint. Dasos initiated carbon assessment for its investments already in 2011. Continuing the development and fine-tuning the measurement methodology, a full-stream carbon impact evaluation at the portfolio level has recently demonstrated a positive overall impact on the on the carbon balance in 2018.