V. Impact Reporting

Monitoring and reporting are critical for accountability. Currently, the best practice is to internally report during pre-investment diligence and to set a regular cadence of internal and external reporting post-investment that can be audited by a third-party every five years.

Pre-Investment

  1. Define the Scope and Objectives:

    • Objective Setting: Clearly define what the organization aims to achieve through its investment activities. 

    • Scope of Analysis: Determine the boundaries of the report. Will it cover the entire organization, specific projects, or particular investments? Identify the stakeholders who will be impacted.

  2. Select Relevant Impact Metrics and Frameworks:

    • Impact Metrics: Choose quantifiable indicators that align with the organization's objectives. These could include metrics like GHG emissions reduced, jobs created, or the number of people reached by a program.

    • Frameworks: Utilize established frameworks and standards, if any, to guide the selection of metrics and reporting methodology. 

  3. Data Collection and Analysis:

    • Data Sources: Gather data from internal systems, surveys, third-party assessments, or publicly available information. Ensure data reliability and accuracy through validation processes. Note maturity of the company and describe the availability of reliable data based on the the stage of the technology or company.

    • Baseline Setting: Establish a baseline for comparison to assess the progress or impact over time.

    • Impact Assessment: Analyze the data to understand the extent of the impact. Use the theory of change to assess the impact.

  4. Adjustment Factors And Rebound Effects:

    • Determine the degree to which the observed impacts can be attributed to the organization's activities versus external factors. This helps in understanding the direct influence of the organization's actions.

    • Evaluate how the organization's contributions compare to those of other entities or factors in achieving the impact.

    • Contemplate potential rebound effects and develop system to evaluate rebound effects or other unintended consequences post investment.

Post-Investment

5. Reporting and Communication:

  • Report Structure: Structure the report to clearly communicate the impact based on the intended audience.

  • Stakeholder Engagement: Engage stakeholders throughout the reporting process to ensure the report meets their needs and expectations. This can involve consultations, feedback sessions, and transparent disclosure of methods and assumptions.

6. Continuous Monitoring and Improvement

  • Monitoring: Implement systems to continuously monitor impact over time. This allows for tracking progress against goals and making adjustments as needed and revisit assumptions around rebound effects.

  • Feedback Loops: Use the findings from the impact report to inform future strategies and improve organizational practices. Continuous learning and adaptation are key to maximizing positive impact. Frame also recommends using third-party verification. 

New Reporting for Realized Impact

Project Frame recommends that for external impact reporting, investors and companies should use tCO₂e/year (distinguishing between emissions type by reviewing Global Warming Potential). 

Using a common metric and timescale will encourage comparability and transparency. If an investor chooses to publish cumulative reporting, it should be clearly defined for previous realized emissions and marked separately from any potential impact forecasting, which can be misleading if taken out of context.

For example: 

100 tCO₂e / year avoided
- 72 tCO₂ / year
- 1 tCH₄ / year