19. Impact measurement approach
Does the DFI publish a methodology explaining its approach to impact measurement?
Does the DFI indicate which standards/initiatives it is aligned to?
Does the DFI explain its approach to determining additionality?
Does the DFI explain its approach to determining impact attribution?
Does the DFI have a policy on evaluation of investments?
An impact measurement approach should be either a standalone document or a dedicated section of the DFI website.
The measurement approach should identify any alignment to recognised impact management standards (e.g. IRIS+ or Harmonised Indicators for Private Sector Operations) as well as the institution’s approach to determining additionality in its activities.
Development additionality addresses the non-financial aspects of a private sector DFI investment that would not be provided by the private sector. This may include things such as provision of technical or governance advice as part of an investment.
Financial additionality refers to the finance that would otherwise not be provided (or leveraged) by the private sector due to real or perceived risks. This may be expressed through terms (such as loan tenor) not offered by the market.
Impact attribution is the relationship between the amount of finance provided and the impacts.
An evaluation policy outlines the DFIs approach to conducting evaluations, the level at which evaluations will occur (e.g. sector, region, country), and the factors that determine whether or not an investment will be evaluated.