‘Benefit corporations’ given own ratings system to showcase activities to investors

A new investment tool for social enterprises and investors in the US has been launched by an NGO that hopes to provide coverage for 2,500 firms by 2016.

B Lab, a non-profit specialising in the certification of so-called benefit or B corporations, has set up the Global Impact Investment Rating System (GIIRS) to assess the social and environmental impact of companies and, hopefully, drive capital towards social enterprises.

Using a ratings approach similar to Morningstar’s investment rankings, GIIRS will analyse the credentials of impact investments as part of a service that will allow investors to easily identify such opportunities, and companies to gain exposure to funding.

GIIRS will standardise metrics for funds and investments, producing one report for all parties on a yearly basis.

The scheme now counts 40 ‘pioneer funds’ among its number, 25 of which worked to help draw up the system. These include JPMorgan, the Calvert Foundation and the Inter-American Development Bank, as well as emerging markets partners like the Bellwether Microfinance Fund and African Agricultural Capital.

B Lab’s long-term targets for the coming years are rather more ambitious, however.

It says it will seek to rate 2,500 companies and 350 funds over the next five years, and attract $1tn to impact investing over the next decade.

Co-founder of B Lab, Andrew Kassoy, said: “GIIRS is inspired by a chorus of voices calling for capitalism to create long term value for both society and shareholders.

“By providing greater market transparency, GIIRS will help unlock hundreds of billions of dollars of sidelined investment capital to flow to the world’s most innovative entrepreneurs, who are addressing social and environmental challenges using the power of business.”