BlueMark Introduces Fund ID, a New Impact Rating System for Investment Managers and Allocators
New tool provides holistic assessment of an investor’s impact across four key pillars of impact accountability: Strategy, Governance, Management, and Reporting
NEW YORK, Oct. 23, 2024 /PRNewswire/ — BlueMark, a leading independent impact verification and intelligence provider for the impact and sustainable investing markets, today introduced a new rating system for impact investors called the Fund ID (or Fund Impact Diagnostic). A white paper outlining BlueMark’s approach and methodology for the Fund ID, as well as results from a pilot application with a first cohort of 36 leading fund managers, is available at www.bluemark.co/fund-id.
The Fund ID is a holistic, fund-level rating that enhances investor decision-making by providing an objective and comparable assessment of a fund’s approach to impact according to its alignment with market best practices, bringing together guidance from leading industry frameworks (e.g., Impact Management Norms, Operating Principles for Impact Management, SDG Impact) and financial regulations (e.g., the EU’s Sustainable Finance Disclosure Regulation and the UK’s Sustainability Disclosure Requirements) into one unified tool.
The Fund ID is designed to be applicable globally across investment strategies and sectors, and provides a straightforward way for investors to compare, contrast, and ultimately benchmark the impact credentials of funds, thereby helping to close accountability and information gaps in the market.
“Every financial market that has achieved scale relies on a combination of verifications, ratings, scores, and benchmarks to help streamline the flow of information and align on market leaders,” said Sarah Gelfand, President of BlueMark. “As the impact and sustainable investing markets enter their next stage of growth, we see a vital need for a holistic impact rating system that will help investors understand, credibly communicate, and improve their approach to delivering impact.”
The Fund ID assessment framework is structured across four key pillars of impact accountability – Strategy, Governance, Management, and Reporting – which mirror similar disclosure frameworks found in other industry standards such as the Taskforce on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD). Each pillar comprises a set of underlying criteria that form the basis for pillar-level scores and the overall rating for the fund (e.g., Platinum, Gold, Silver, or Bronze).
As part of each evaluation, BlueMark produces a Fund ID rating and assessment report that provides a shorthand for both fund managers and investors into funds (i.e., allocators) to better understand the strengths and gaps in a fund’s approach and performance. In this first release, the rating methodology is designed primarily to support the analysis and credentialing of investment products in private markets seeking to generate measurable social and environmental impact; however, its principles apply broadly to entities investing in or managing other asset classes.
To validate the ability of the Fund ID to produce consistent and discriminating ratings, the methodology was tested using data from a subset of BlueMark’s previous private markets clients. BlueMark also invited 36 leading fund managers – representing a diverse array of investor strategies, sizes, and thematic focus areas – to participate in a pilot program to further test and refine the Fund ID methodology prior to rolling it out publicly.
Pilot participants received a broad range of scores on their Fund ID assessments, with individual scores ranging from 19% to 86% of total available points and an average score of 61%, equivalent to a Gold rating. This average rating and the relatively high proportion of Gold-rated funds indicate that the Fund ID is an ambitious yet achievable impact rating system.
“Like most allocators investing in impact, we have our own method for evaluating the practices and promises of fund managers,” said Diana Watson, Investment Manager at Tsao Family Office, one of the participants in the pilot program. “The independent ratings provided by BlueMark through the Fund ID are a fantastic supplement to our due diligence process and give a strong signal of GP credibility.”
About BlueMark
BlueMark is a leading independent impact verification and intelligence provider for the impact and sustainable investing market. As a certified B Corp, BlueMark’s mission is to “strengthen trust in impact investing” by equipping investors with impact verification services, benchmarks, and analytics. BlueMark’s verification methodologies draw on a range of industry standards, frameworks, and regulations, including the Impact Management Project (IMP), Impact Performance Reporting Norms (Reporting Norms), Operating Principles for Impact Management (Impact Principles), SDG Impact, Sustainability Disclosure Requirements (SDR), and Sustainable Finance Disclosure Regulation (SFDR). Learn more at www.bluemark.co.
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SOURCE BlueMark
