3 Investment Decision and Deal-Making

3.1 Investment Decision

Integrate the results of impact analysis into the investment decision-making process. This involves weighing the four parameters of impact risk, impact generation, financial risk and financial return. The trade-offs being made should be articulated and discussed (e.g. at an investment committee meeting), and assessed for alignment with the investor’s mission and strategy.

3.2 Investment Deal

Incorporate impact generation and impact risk considerations into the investment deal. This involves attention to:

  • 3.2.1 Objectives

    What are the impact objectives for the organisation and the investment, and how will these be measured?

  • 3.2.2 Oversight

    How will performance against the set objectives be monitored? What are the reporting requirements, and how will the reporting be used?

  • 3.2.3 Protection Measures

    What are the ways in which the organisation may underperform or fail with respect to impact, and what measures can be built into the investment deal to enable an address of such problems?

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