Impact Management Project (IMP)

The Impact Management Project (IMP) is not a company, a fund, or a specific investment product. Instead, think of it as a global, collaborative effort to build a common language for talking about impact. For years, investors interested in doing good with their money faced a Tower of Babel; one fund would call its work “sustainable,” another “responsible,” and a third “ethical,” with no clear way to compare them. The IMP brought together over 2,000 organizations—including companies, investors, and standards bodies—to agree on shared fundamentals for how we measure and manage our impact on people and the planet. Its goal is to move beyond vague labels and create a system where the social and environmental performance of an investment can be understood with the same clarity as its financial performance. This consensus is now stewarded by Impact Frontiers.

At first glance, “impact” might seem like a soft, feel-good topic, far removed from the hard-nosed calculations of value investing. But the two are deeply connected. A true value investor, in the tradition of Benjamin Graham, performs rigorous due diligence to understand a business inside and out, searching for a margin of safety. The IMP provides a powerful lens for this analysis. Understanding a company's real-world impact helps you identify hidden risks and opportunities that a standard financial statement won't show. A company that pollutes a river (a negative impact) may look cheap today, but it carries the future risk of regulatory fines, cleanup costs, and brand damage. Conversely, a company that treats its employees exceptionally well (a positive impact) might foster innovation, reduce turnover, and build a fiercely loyal customer base—all of which create durable long-term value. The IMP framework helps you look past the reported numbers to the underlying quality and resilience of the business, which is the very heart of value investing. It helps you assess the full value of an enterprise, not just its accounting value.

The IMP's core framework is built on five simple questions that help any investor dissect the impact of a company or investment. Think of it as a toolkit for looking under the hood of an “impact” claim.

• What: What outcome is the company contributing to, and is it positive or negative? This focuses on the specific change that occurs, such as improved literacy rates or increased carbon emissions.
• Who: Who experiences this outcome? This dimension asks you to identify the specific stakeholder groups affected, such as employees, local communities, customers, or the planet at large. It pushes you to be specific beyond “people in general.”
• How Much: How significant is the outcome? This covers the scale (how many people are affected?), depth (how much change do they experience?), and duration (how long does the effect last?).
• Contribution: How much did the company’s actions contribute to the outcome, compared to what would have happened anyway? This is a crucial reality check to ensure you're not giving a company credit for a positive trend it had little to do with.
• Risk: What is the risk that the impact doesn't happen as expected, or is not as positive as claimed? This aligns perfectly with an investor's mindset of evaluating risk before committing capital.

Based on the Five Dimensions, the IMP created a simple A-B-C classification to help investors categorize and understand a company's intentions and performance. This helps cut through the marketing jargon.

1. Act to Avoid Harm (A): This is the baseline. These companies are taking steps to mitigate negative impacts that their businesses cause. For example, a factory installing scrubbers to reduce air pollution or a tech company working to protect user data. They are essentially practicing “do no harm.”
2. Benefit Stakeholders (B): These companies go a step further by actively creating positive outcomes for their stakeholders. This could include paying a living wage that improves employees' quality of life, using Fair Trade sourcing that benefits suppliers, or creating products that genuinely improve customer well-being.
3. Contribute to Solutions (C): These are companies whose core business model is designed to address a major social or environmental problem. Think of a renewable energy company fighting climate change or a biotech firm developing a vaccine for a widespread disease. Their financial success is directly tied to their positive impact.

Imagine you are a value investor analyzing two different apparel companies.

• Company 1 proudly states it has a clean supply chain and avoids child labor. Using the IMP framework, you would classify this as Act to Avoid Harm (A). This is good, but it's essentially meeting a minimum standard.
• Company 2 also avoids harmful practices, but it goes further. It invests in training programs for its garment workers in developing nations and pays them a premium wage that allows them to save money and send their children to school. This is a clear example of Benefit Stakeholders (B).

The IMP framework helps you see that while both companies might have similar P/E ratios, Company 2 is likely building a more resilient supply chain, a stronger brand, and a more motivated workforce. This “impact” is not just a nice story; it's a potential source of competitive advantage and long-term value that is often missed by traditional analysis or a simple ESG score. By using this common language, investors can make better comparisons and, ultimately, better decisions.