Implementing The Impact Performance Reporting Norms: Case Study with the Builders Fund

Overview

This case study explores how the Builders Fund implemented the Impact Performance Reporting Norms to streamline impact report development. The Reporting Norms – designed to address a gap in existing impact standards, frameworks, and guidance – support fund managers in sharing private data with their capital providers under non-disclosure agreements and facilitate the sharing of positive, negative, and confidential information. 

With over a decade of experience in impact investing, the Builders Fund saw an opportunity to enhance their reporting practices by adopting these industry-leading standards. In partnership with Proof, they were able to streamline data collection and reporting, enhance transparency, and deliver meaningful insights to their stakeholders. Their experience offers valuable insights for other impact investors looking to strengthen their reporting practices.

Background: Builders Fund’s Approach to Impact

Builders Fund is a private equity firm investing in purpose-driven businesses that generate collinear financial returns and positive social and environmental outcomes. Their impact focus encompasses three key areas:

1. Climate Solutions: Investing in companies that reduce resource consumption, minimize waste, and support climate resilience
2. Healthy Biosphere, Healthy Society: Business models that expand regenerative agriculture & aquaculture and sustainable consumer products, Food as Medicine, chronic disease management, and solutions to the mental health crisis
3. Shared Prosperity & Social Wellbeing: Supporting businesses that create quality jobs and economic opportunities in underserved communities, expand ethical supply chains & fair trade, and outcomes-based education

The fund works with multiple stakeholder groups, including limited partners seeking both financial returns and impact, portfolio companies building purpose-driven businesses, and communities impacted by these investments.

Understanding the Reporting Norms

The Reporting Norms, released in April 2024, provide a structured framework for communicating impact performance. Unlike many existing frameworks, the Norms specifically address how investors with the intention to contribute to positive impact creation can report with an emphasis on transparency and consistency.

They guide asset managers in clearly articulating:

• The actual impact results achieved across a portfolio
• The methodologies used to measure impact
• The relationship between financial and impact performance
• The context and limitations of reported data

The impact investing field has struggled with inconsistent reporting practices that make comparing performance difficult. The Reporting Norms address several challenges:

• Comparability: Enabling meaningful comparison between funds
• Credibility: Enhancing the credibility of impact claims
• Decision-usefulness: Providing information stakeholders can actually use
• Efficiency: Reducing reporting burden for asset managers and portfolio companies

Why Builders Fund Adopted the Norms

While Builders Fund had established solid impact measurement practices, they recognized several compelling reasons to adopt the Reporting Norms:

1. Enhanced stakeholder communication: The Norms provided a framework to communicate impact more clearly
2. Industry leadership: As an established impact investor, they saw an opportunity to model best practices
3. Improved comparability: Making it easier for stakeholders to benchmark performance
4. Future-proofing: With increased regulatory attention on impact claims, adopting rigorous standards positions the fund well

"As systems thinkers, the Builders Fund team prioritizes field-building efforts that help refine our IMM strategy and strengthen the sector. We recognize the need for a shared impact performance reporting process that builds credibility with investors and can be replicated across all asset classes. To help catalyze this new standard, we've been actively involved in Impact Frontier's pilot program of the new Impact Performance Reporting Norms." - Amelia Ahl, Director of Impact Measurement and Management at Builders Fund

The Implementation Process

Together with Proof, the Builders Fund took a practical approach to implementing the Reporting Norms:

1. Assessing existing practices: Mapping the Fund’s existing framework alignment – including the Sustainable Development Goals and GIIN IRIS+ metrics – against the Reporting Norms to identify reporting gaps
2. Stakeholder consultation: Understanding what information would be most valuable to limited partners
3. Refining metrics: Working with portfolio companies to ensure metrics were both aligned with the Reporting Norms and relevant to each business
4. Designing the report: Using Proof’s Report Generator to structure the report according to the Reporting Norms, including:
   1. Transparent methodology: Dedicated sections to document measurement approaches and assumptions
   2. Integrated financial and impact data: Connecting performance metrics with impact outcomes
   3. Digital reporting: Creating interactive reports that adhere to the Norms while allowing stakeholders to explore data at different levels
   4. Comparative analysis: Supporting benchmarking against industry standards and peers

Results and Lessons Learned

The implementation yielded several significant benefits for the Builders Fund, including:

• Improved stakeholder engagement: Limited partners reported greater clarity in understanding impact creation
• Enhanced data quality: The structured process led to more reliable and complete impact data
• Better decision-making: Standardized data enabled more nuanced analysis
• Industry leadership: Early adoption positions Builders Fund as a leader in impact reporting

Through their experience, Builders Fund identified key lessons for other investors:

1. Focus on materiality: Focus on the impact dimensions most relevant to your investment thesis. Even if you can only report on some of the categories, just getting started provides a positive opportunity to build momentum and explain where you plan to head in future reports
2. Balance standardization and relevance: While standardization across portfolio companies can be helpful for benchmarking, metrics must remain meaningful to each business model
3. Build capacity: Portfolio companies may need support to understand the value of standardized reporting, so start discussing the benefits and use of impact data early on and allow time for it to be procured
4. Leverage technology: Digital platforms significantly reduce the implementation burden. Proof supported Builders Fund to move from a spreadsheet-driven to digitally native reporting process, focused on interoperability and data sharing
5. Embrace iteration: Continuous improvement yields greater long-term value than perfect implementation

"For investors considering implementing the IPRN guidelines, start with the information you already have access to, share at least one case study that illustrates your work in action, and be transparent in the report about how you plan to evolve and improve your impact performance reporting over time. We repeatedly hear from LPs that transparency is the most important aspect of reporting. Rather than wait until you have more data, start with what you have and commit to continuous improvement." - Amelia Ahl

The implementation also revealed several challenges and opportunities:

Challenges:

• Finding the right balance between detailed reporting and the capacity of portfolio companies
• Establishing appropriate benchmarks across diverse business models
• Communicating methodological limitations without undermining confidence in reported impact
• Case studies – shown to be high priority element for LPs – are an area open for interpretation and that would benefit from further guidance and streamlining to avoid marketing style storytelling

Opportunities:

• Developing more sophisticated approaches to impact attribution
• Integrating the Reporting Norms with other frameworks
• Creating a community of practice to share best practices

Future Directions

Building on their implementation, Builders Fund plans to evolve their approach in several ways:

1. Deeper integration with investment decisions: Connecting standardized metrics to screening, due diligence, and value creation
2. Enhanced portfolio company support: Developing resources to help companies use impact data effectively
3. Advanced attribution analysis: Working with Proof to better understand contribution to measured outcomes
4. Customized stakeholder views: Creating tailored reporting experiences for different audiences
5. Industry collaboration: Sharing lessons learned to contribute to the evolution of impact measurement standards

“The Reporting Norms were born out of a promise: to make impact reports more useful for asset owner readers, while reducing the reporting burden on impact fund managers. The experience of Builders Fund shows how combining the Reporting Norms with technology solutions can be a powerful way to boost reporting efficiency — while also generating deeper, high-quality insights into real-world impact performance.” - Matt Ripley, Director, Impact Frontiers

Conclusion

Builders Fund's implementation of the Reporting Norms through Proof's platform demonstrates how standardized reporting enhances both the practice and credibility of impact investing. By bringing greater clarity and comparability to impact reporting, this approach strengthens stakeholder trust while providing more actionable information.

As impact investing matures, adoption of standardized frameworks becomes increasingly important. Technology platforms like Proof play a crucial role in making these standards practical and accessible. Through their partnership, Proof and Builders Fund are not only improving their own reporting practices but also contributing to advancement of the broader field. Their experience offers valuable insights for investors navigating the evolving landscape of impact measurement.