About the Investor Influence Project

At a time when many have big questions about today’s political and economic systems, it is more important than ever to reflect on what can improve and how.

The Predistribution Initiative (PDI) is thus pleased to share insights from our collaboration with Impact Frontiers (IF) on the Investor Influence Project formerly named Investor Contribution 2.0). This project takes an expansive view of the multifaceted ways investors shape outcomes for stakeholders and the natural environment and recommends that these considerations should be an embedded part of investors’ impact management approaches, recognizing that:

Investors’ activities can lead to both positive and negative changes in outcomes.

Investors can influence outcomes not only through their portfolio companies, but also through their own activities as a firm.

This influence can happen through several pathways, including addressing (or contributing to) system-level issues.

For those investors with the goal of positively changing outcomes experienced by stakeholders, this project also frames the importance of considering the extent to which the investor’s activities caused those changes in outcomes.

We are excited to share the products of this project, which we hope can be further refined through engagement with standard setters and piloting with investors and their stakeholders. Below we provide a high-level overview of three key documents and templates, which will also be housed on the IF website later this year (see links below). We welcome your feedback, including your interest in participating in a future convening to discuss next steps, or other collaboration ideas related to advancing these important topics. As a reminder, this phase of the project focused on private capital asset classes.

Whitepaper: The Investor Influence Whitepaper explores the potential for private equity, private debt, and venture capital investors to measure and manage their own activities and outcomes – expanding the lens from what has been traditionally and primarily focused on the effects of portfolio companies on social and environmental outcomes.

Tools: Additionally, for private capital asset classes, this project provides tools to measure, manage, and report on both intended positive impacts and potential unintended negative consequences of investors’ activities, aiming to equip investors with the resources needed to navigate their complex roles responsibly.

1. The Positiv e Investor Contribution Claim Template is focused on positive causal investor impact and aims to support practitioners in addressing this challenge.

2. The Draft Disclosures For Use by Limited Partners (LPs) and their Consultants in Due Diligence, Monitoring, and Evaluation of General Partners (GPs) is designed to support investor measurement and management of outcomes relating to investment structures and governance, with a particular – though not exclusive – focus on outcomes relating to socio-economic inequality.

PDI Reflections and Next Steps

Reflections: We are grateful to the numerous people and organizations who provided input into this extensive project and to Omidyar Network for their generous support.

Throughout these consultations, the PDI team learned that there is not a strong understanding across the investment community about how their activities relating to investment structures and investment governance may – typically inadvertently – be associated with negative outcomes for stakeholders and/or the environment. Additionally, there is not a strong understanding of how these activities are associated with system-level outcomes, and how those system-level outcomes can then affect investors’ diversified portfolios through feedback loops. Lastly, investors sought a better understanding of “what does good look like?” These are all questions we intend to unpack through follow-on work.

Looking Ahead: As next steps, PDI intends to broaden our existing literature compiled to further explore case studies and relationships between financial actors’ activities and resulting impacts and risks. The findings from this work will be used to better socialize a common understanding of “impact pathways” (pathways through which investors influence outcomes for stakeholders and the environment) and their feedback loops (how these impacts translate into financial risks and opportunities in diversified portfolios). In collaboration with partners, this information can then inform improved:

Management frameworks for investors to improve their practices;

Measurement, evaluation, and disclosure tools; and,

Incentives for investors to use the above two outputs.

To this end, this work also supports PDI’s contributions to the Taskforce on Inequality and Social-related Financial Disclosures (TISFD).

PDI manages other workstreams which support asset owners and allocators in evolving their own investment governance models and financial analysis tools so that they can consider system-level risks and opportunities in their structuring, pricing, and allocation of capital, as well as in engagement with investees, fund managers, and other stakeholders.

Stay tuned for more details on next steps, including getting involved. We hope you will join us as we continue to co-create learnings and tools on these important topics!