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Assessing the latest GIIN impact measurement tools through an FCI lens

Writer's picture: Hasnane ArainHasnane Arain

A data-driven approach to impact


At FaithInvest, we support faith-based asset owners in aligning their investments with their beliefs, teachings, and values. A key part of this process is ensuring that impact assessment tools reflect the principles underpinning Faith-consistent Investing (FCI).


Two such tools, developed by the Global Impact Investing Network (GIIN), provide fund-level approaches to impact measurement. The methodology seeks to quantify social and environmental benefits using structured metrics, offering investors a way to assess and compare impact performance across different portfolios.


Alignment with faith-based investing


GIIN logo

The GIIN tools introduce sector-specific impact assessments, covering areas such as climate action, education, and healthcare. One also incorporates quality-adjusted live years (QALY) as a measure of social benefit, aiming to standardise impact measurement at scale.


While these metrics offer a structured approach to evaluating positive outcomes, they do not account for the values-based considerations unique to faith-based investors and, indeed, the report does state that the tools are meant to be supplemented with additional criteria as needed.


Of course, FCI is not solely about maximising impact – it is about ensuring that investments reflect faith-driven priorities. Many faith-based institutions apply exclusionary screens, engagement/advocacy policies, and positive investment criteria based on theological teachings. While GIIN’s framework offers a robust way to measure impact, faith-based investors require tools or processes that also account for moral, ethical, and religious imperatives within investment decision-making.


What the research says on traditional impact measurement


Academic research has long highlighted the challenges of standardising impact measurement across different investor types. A study by Clark, Emerson, and Thornley (Duke Fuqua) on impact investing underscores the complexity of aligning diverse stakeholder objectives, noting that 'the lack of tangible data has left the field in an ambiguous state more broadly', adding: 'the blending of mission and management is still more of an art than a science'.


Similarly, a 2021 study published in the Erasmus Law Review found that most impact metrics focus on material ESG outcomes rather than the specific ethical motivations of faith-based asset owners.


These findings align with what we observe at FaithInvest. While GIIN's methodology provides a structured approach to impact measurement, it does not inherently embed theological perspectives, ethical exclusions, or mission-driven investment priorities. This gap presents an opportunity for faith-based investors to refine existing frameworks by integrating faith-consistent metrics that go beyond conventional ESG/impact scoring.


The need for a faith-aligned impact framework


As data-driven approaches to impact investing evolve, the challenge remains: how can faith-based investors quantify and measure the alignment of their investments with their values? While GIIN provides useful methodologies, integrating faith-driven criteria into structured impact assessment tools remains an essential next step. FaithInvest continues to work with faith-based asset owners to refine FCI assessment methodologies, ensuring that investment policies and strategies are both impact-driven and values-led.


We can help!


Our FCI assessment service provides free, confidential evaluations of investment policies & guidelines (IP&Gs), offering guidance on strengthening their alignment with faith values. Please reach out for a free evaluation of your IP&G at info@faithinvest.org.

© 2023 by FAITHINVEST

FaithInvest is a registered charity in England and Wales 1187015 and a company limited by guarantee registered in England and Wales 11862410. Although registered in the UK, FaithInvest has been deemed equivalent to a 501(c)(3) public charity in the United Sstates by NGOsource.

Disclaimer

FaithInvest is an international nonprofit organisation that empowers faith groups to invest in line with their beliefs and values. FaithInvest is not authorised by the Financial Conduct Authority and does not provide financial or investment advice. Information provided on FaithInvest’s website or its other communication channels does not constitute financial or investment advice. If you wish to receive any form of financial or investment advice, please consult a qualified and independent financial advisor. You should conduct your own due diligence in relation to any investment opportunities or strategies you choose to pursue. FaithInvest does not promote any specific investments or opportunities and cannot therefore accept responsibility for any specific financial or investment decisions you make following participation on its website platform.

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