To drive performance, LeapFrog implements a leading integrated measurement tool, FIIRM (Financial, Impact, Innovation and Risk Management).
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.
The report, by the IFC, is the most comprehensive assessment so far of the potential global market for impact investing. It estimates that as much as $269 trillion—the financial assets held by institutions and households across the world—is potentially available for investment. The report includes a comprehensive overview of LeapFrog’s proprietary measurement framework, FIIRM, developed and refined over a decade of investing in some of the most innovative emerging markets businesses, and measuring commercial and social impact outcomes.
“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.”