Impact Due Diligence (IDD) ensures that each investment is aligned with the fund’s intent, measurement, and additionality; that it manages impact risks; and that it delivers net positive results throughout the investment cycle. Its purpose is twofold: to safeguard the integrity of Article 9 (SFDR) and to create sustainable, verifiable value for investors.
At ILV SILVER, we have developed this service for managers and LPs who invest with a sustainable objective under Article 9 and want to raise the bar in terms of rigor, comparability, and credibility.
What we do in an Impact IDD
- Minimum safeguards (SFDR): We verify the effective implementation of safeguards (human rights, decent work, anti-corruption, etc.) and activate corrective measures if serious risks are identified.
- PAI: materiality and relevance: We assess Principal Adverse Impact indicators, prioritize critical ones, and design mitigation/monitoring plans.
- Alignment with the SDGs: We map the investment’s theory of change to the SDGs, ensuring consistency between the impact thesis, KPIs, and governance.
- ESG ≠ Impact (but both add value): We differentiate ESG management (material risks and opportunities) from impact investing (positive, measurable outcomes for stakeholders). We integrate both: ESG as the license to operate, impact as the engine for Article 9 results.
- Impact investment analysis:
- Intentionality and alignment: We verify that the investment purpose and governance are anchored to specific impact outcomes.
- Measurement and management (IMM): We define IRIS+ metrics, establish baselines/targets, and design monitoring and improvement plans (including verification when appropriate).
- IMP + Theory of Change: We articulate the 5 Dimensions of the IMP with the ToC to provide a rigorous and comparable framework, assessing impact risk and additionality.
What your Article 9 fund gains
- Regulatory rigor: Traceability of the sustainable objective and control of PAIs and safeguards.
- Comparability and efficiency: Standardized KPIs and criteria that reduce burdens and facilitate benchmarking across portfolios and managers.
- Active impact risk management: Identification, prioritization, and mitigation plans with ongoing monitoring.
- Value and credibility: Clear evidence of outputs/outcomes and the investor’s contribution (additionality).
Want to turn “compliance” into “leadership” with impact?
Learn more about our services: https://www.ilvsilver.com/es/financiero/asg-impacto/
