To drive performance, LeapFrog implements a leading integrated measurement tool, FIIRM (Financial, Impact, Innovation and Risk Management).
“We are living in a phenomenal age. If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits and recognition for business, we will have found a sustainable way to reduce poverty in the world.”
The central premise of LeapFrog’s profit with purpose approach is that there should be no trade-off between financial return and social impact. In fact, we are demonstrating that orientation towards a social purpose can drive greater long-term financial returns.
To drive profit-with-purpose performance, the LeapFrog team have developed a distinctive proprietary measurement framework, FIIRM, which encompasses financial, impact, innovation and risk management factors. FIIRM incorporates measurement of financial and operational Key Performance Indicators as well as governance indices, which are benchmarked to global best practice standards. This enables LeapFrog’s investment teams and portfolio company CEOs and CIOs to measure and drive performance towards both profitability and impact objectives. The FIIRM system is complemented by an in-house Consumer Insights team, gleaning feedback from customers in-store, by telephone and online, as well as extensive emerging consumer research data sets.
LeapFrog’s decade of experience in impact measurement led to the co-creation of and support for the Operating Principles for Impact Management issued by the IFC and World Bank Group. The nine principles were created to set a basic market standard for impact investing. They will serve as a guide to deployment of capital by institutional investors – including pension and sovereign funds, insurers and banks, endowments and family offices. The impact investment market stands at $228 billion today, a five-fold increase from the 2016 launch of the UN Sustainable Development Goals.
LeapFrog’s Responsible Investment Code
LeapFrog’s Profit with Purpose investment approach pursues synergies between financial returns and social impact, where each enhances the other. The Responsible Investment Code sets out the overarching policy, standards, and guidelines that enables LeapFrog and its portfolio companies to deliver integrated financial and social results by incorporating best practice across ESG and impact management. LeapFrog supports its portfolio companies in adoption of the code for effective on-going management of risks and opportunities. LeapFrog recognizes that best practice evolves with time and updates the code regularly for ensuring relevance.