By Adrian Hornsby, Head of Research at Investing for Good
A good analyst is one who analyses social or environmental good, rather than just a skilful and, in this sense, ‘good’ analyst. But there is a third meaning too. Like a good Samaritan or a good witch, a good analyst can be a force for good, with a moral power and a social impact all of their own. By showing how and where good is taking place, the good analyst can drive energy, resources and capital toward it.
I’m guessing most readers of this blog would roughly go along with this. Most would probably also agree that to do their work, good analysts need good tools, and that establishing toolkits and methodologies is among the foremost tasks of our field.
The Good Analyst, a new publication from Investing for Good (IFG), is a response to this challenge. IFG is the UK’s first Financial Services Authority-regulated Community Interest Company. IFG is relatively unusual in the social-purpose sector, in that it is orientated toward the “buy-side” of capital. Much of the impact research done to date has come from the “sell-side” — that is, from organisations that advise charities and social enterprises on measuring, reporting and analysing their own impact. IFG is in a subtly different position. As a regulated adviser primarily to socially-motivated investors,# we needed a form of analysis that could sit atop the many types of impact being reported by social-purpose organisations, and that could then consistently relate them to each other.
The Good Analyst is in essence a technical manual for performing second-tier analysis. It contains all the raw details for other impact analysts and thinkers to learn from and adapt for their own use. It also includes a set of guidelines for compatible primary impact reporting, in line with the emerging sense of common principles and good practice in this area.
Any analysis is invariably shaped by the methodology being used, and the thinking that drives it. To be transparent on this front, The Good Analyst opens with a far-reaching introduction, covering the models and concepts on which the system is built, and why. The publication offers a lightning history of how impact and financial analysis have arrived where they are today and an overview of impact standards distilled from various current methodologies. This section argues for the pivotal role impact analysis can play in reshaping the contemporary relationship between money, impact, and the society in which we live. At a time when society is seriously rethinking its values, we hope The Good Analyst can be a stimulating and helpful contribution to that process.