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January 23, 2018

Choices in Impact Measurement &

Management

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Thank you for joining us today!

Please note:

• All participants are already muted upon entry to the webinar session.

• Use the “chat” function to submit questions or concerns during the

broadcast.

• We’ll share a recording after the webinar.

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Agenda

• Key findings on impact measurement and management:

• What should I measure?

• How do I measure?

• Then what?

• Discussion among impact investors:

• Sarah Wilson, Nuveen, A TIAA Company

• Michael Eddy, Global Innovation Fund

• Grace Horwitz, Blue Haven Initiative

• Questions

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Abhilash Mudaliar

Research Director

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The State of Impact Measurement & Management Practice

169impact investor

respondents

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A variety of motivations inform IMM practice

83%78% 75%

63%

50%45%

21%16%

43%

To betterunderstandour impact.

To proactivelyreport our

impact to keystakeholders.

To manage orimprove our

impact.

We believethat impactdata havebusiness

value.

We need tocommunicateour impact for

marketingand/or

fundraisingpurposes.

We arerequired by

our investorsor donors tomeasure and

report ourimpact.

There is clientdemand or

pressure fromchanging

cultural normsto measure

and report ourimpact.

We arerequired bygovernment

regulations tomeasure and

report ourimpact.

Other

Source: GIIN

n = 168 167 169 168 158 150 145 113 44

Motivations for measuring and managing impact

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Key decision points:

1. What should I measure?

2. How do I measure?

3. Then what?

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What should I measure?

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Investors seek social & environmental impactSDG-aligned impact themes targeted, by number of respondents

Source: GIIN27

5

9

10

14

16

24

27

28

29

32

34

38

39

48

48

54

74

Other

Life below water

Peace, justice, and strong institutions

Partnerships for sustainable development

Life on land

Zero hunger

Gender equality

Climate action

Clean water and sanitation

Reduced inequalities

Responsible consumption and production

Industry, innovation, and infrastructure

Sustainable cities and communities

No poverty

Affordable and clean energy

Quality education

Good health and well-being

Decent work and economic growth

n = 124

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Investors measure different types of impact

153

130

72

64

62

58

51

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Measure social/environmental outputs

Measure social/environmental outcomes

Measure the breadth of our impact

Measure whether our impact is additional

Measure the depth of our impact

Benchmark our social/environmental performance

Measure whether our impact is attributable

Measure the longevity of our impact

Source: GIIN

Types of impact measuredn = 169

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…using a wide variety of tools

Source: GIIN

Tools, indicator sets, and standards used in IMMn = 137

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3

3

7

8

14

16

18

18

19

30

56

57

85

0 20 40 60 80 100

Other

Total Impact Measurement and Management (TIMM)

PRISM

Social Return on Investment (SROI)

Global Alliance for Banking on Values (GABV)

Sustainability Accounting Standards Board (SASB)

Leadership in Energy and Environmental Design (LEED) ratings…

Global Reporting Initiative (GRI)

Aeris CDFI ratings system

SPI4 / Social Performance Task Force (SPTF)

Principles for Responsible Investment (UNPRI)

B Analytics / GIIRS

United Nations Sustainable Development Goals (SDGs)

IRIS

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How do I measure?

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Most impact investors set impact targets

41%

59%

No

Yes

No, we do not set impact targets.

Yes, we set impact targets.

Percentage of investors that set measurable impact targetsn = 169

Source: GIIN

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Investors balance standardization and customization

37%

24%

20% 19%

We use a set of standardizedmetrics across all investments

within our portfolio.

We select a set of metrics for eachsector and/or impact objective

within our portfolio.

We customize some metrics foreach investment and use some

metrics across our entire portfolio.

We select a specific set of metricsfor each investment.

Level of customization/standardization of impact metricsn = 169

We use a set of standardizedmetrics across all investments

within our portfolio.

We select a set of metrics for each sector and/or impact

objective within our portfolio.

We customize some metrics for each investment and use some

metrics across our entire portfolio.

We select a specific set of metrics for each investment.

Source: GIIN

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IMM is a core responsibility across teams

7871

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15 16

IMM is a responsibility onlyof our investment team.

IMM is a responsibility ofboth dedicated staff and

our investment team.

We contract out our IMMwork to external

consultant(s).

IMM is a responsibility onlyof one or more staff

dedicated to that purpose.

Other

Human resources allocated to IMMn = 169

Source: GIIN

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Investors rely on implicit and explicit incentives

Incentives for investor staff & investeesn = 100

82%

18%

Yes, we incentivize the achievement of impact targets

No, we have no incentives for impact

For staff:

• Intrinsic motivations

• Performance evaluations

• Compensation

For investees:

• Intrinsic motivations

• Requirements for

investment/follow-on capital

• Investment terms

• Governance/management changes

• Management compensation

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Then what?

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Impact data inform key investment decisions

112 110

7166

5546

23

10

For pre-screeningor due diligence

Informinvestmentselection /portfolioallocationdecisions

Identifyopportunities forcapacity-building

support ortechnical

assistance

Inform portfoliomodeling and

strategy

Improveinvestees'

operationalefficiency

Help design orrefine

products/servicesof our investees

Inform exitdecisions and/or

exit timing

Other

Source: GIIN

Uses of impact data in investment managementn = 148

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…and improve impact achieved

123

10396 92 89

8375

2

Communicateresults to

stakeholders

Identify orrefine

appropriatemetrics

Improve ourprocess for

analyzing andinterpretingimpact data

Assess impactand ESG risk

factors

Set or reviseimpact

expectationsand/or impact

targets

Refine our datacollectionprocess

Identify whichstakeholders

are affected byour investments

Other

Source: GIIN

Uses of impact data in impact managementn = 144

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Speakers

Sarah WilsonDirector, Responsible Investing

Nuveen, A TIAA Company

Michael EddyVice President

Global Innovation Fund

Grace HorwitzAssociate

Blue Haven Initiative

@theGIIN

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Impact Measurement & Management at TIAA/NuveenSarah Wilson

Director, Responsible Investing

FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION

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Responsible Investment at TIAA/Nuveen: Our Scale

$1.02 Billion**invested in our Social Impact Portfolio along three themes:▪ Financial Inclusion▪ Affordable Housing▪ Community & Economic

Development

Based on assets under management as of March 31, 2017.* As a PRI signatory, all of TIAA’s assets are committed to RI principles. A requirement of being a signatory is adhering to the PRI reporting framework which has been designed to achieve three main sets of objectives: 1) Accountability of the PRI: To ensure accountability of the PRI initiative and its signatories, 2) Signatory transparency: to encourage signatory transparency on responsible investment activities. 3) Signatory assessment: to provide tools to allow signatories to measure their own performance with objective indicators**Represents investment commitments. Adjusted valuation of AUM is $611 million.

$600+ Billion committed to RI principles under the UN Principles for Responsible Investment

$77 Billion in sustainability initiatives within real assets

>$18 Billion in ESG-focused products

FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION

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Impact Investing Portfolio

Team

Responsible Investment

Team

Impact Measurement & Management Roles

• Manages $1 billion impact investing portfolio for the TIAA General Account

• Defines impact themes and underwrites/selects investments within each theme

• Communicates investment & impact outcomes to internal stakeholders

• Provides impact measurement/ESG integration expertise

• Designs harmonized impact metrics across multiple GPs within a theme

• Participates in external initiatives to advance the practice of impact measurement

+ many other broad ESG responsibilities

• Engages with GPs on impact measurement approaches

• Gathers/harmonizes impact data from GPs

The TIAA General Account is an insurance company account and does not present an investment return, and is not available to investors. FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION

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• Demonstrating strength of alignment with TIAA/Nuveen impact

themes during initial due diligence and on an ongoing basis

• Measuring GP progress toward both their business and impact

targets over time

• Shedding light on strategic differences between GPs within the

same theme (Example: Social vs. environmental metrics in

affordable housing)

Use Cases for Impact Data

FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION

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This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not

provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular

investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services

and exercise independent judgment with respect to their clients.

Please note socially responsible investments are subject to Social Criteria Risk, namely the risk that because social criteria excludes securities of certain

issuers for non-financial reasons, investors may forgo some market opportunities available to those that don’t use these criteria.

The investment advisory services, strategies and expertise of TIAA Investments, a division of Nuveen, are provided by Teachers Advisors, LLC and TIAA-

CREF Investment Management, LLC. Securities offered through Nuveen Securities, LLC.

374975-INST-AN-1/19

Disclosures

FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION

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Global Innovation FundMichael Eddy

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• GIF is a $200 million non-profit fund

• It invests in innovations that help people in the developing world living on less than $5/day

• It’s like a venture capitalist, willing to take smart risks – but with the goal of maximizing social returns

GIF aims to make a big difference in the lives of millions of people

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Practical Impact Assessment

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• A convenient, updateable forecast of impact, used before, during and after investment

• Allows you to start with good-enough order of magnitude estimates; refine as information improves

• Used alongside investment-specific indicators that track performance of each investment

• Promotes a portfolio-level view of effectiveness enabling us to track portfolio performance

• Complements more data-intensive, Social Return on Investment (SROI) analysis

Practical Impact Assessment

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Blue Haven Initiative

Privileged & Confidential

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Confidential

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Confidential

BHI Impact Objectives

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Invest in sustainable and

scalable businesses

Target companies providing goods

and services to underserved

consumers and markets

Develop the impact

investing ecosystem

Support business enabling

environments

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Confidential

Step 1: Estimating & Planning Impact

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Challenge• Skills mismatch and lack of appropriate education /

training lead to a lack of job readiness and high rates of unemployment among youth in Kenya

• Employers have difficulty finding and training new talent due to lack of in-house human capital resources

Value PropositionSpire provides career development and training services to help growing companies instill a baseline level of skills in entry and mid-level hires.

Metrics & Measurement

1. Companies served2. # of students 3. # of classes (existing + new)4. Customer NPS score5. FTEs

Desired Outcomes• Reduced unemployment • Fewer job vacancies• More effective professional development• Reduced employee churn• Improved business performance

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Confidential

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Impact Thesis:

• PEG makes healthy, safe off-grid power solutions affordable to the Ghanaian consumer through a PAYG model with long term plans and asset-financing emulating that of M-KOPA.

Impact Update:

• PEG has emerged as a leading distributor of solar home systems in Ghana, focused on adapting the PAYG model in the West African context.

• PEG has taken a number of steps to accelerate sales and improve repayment rates, including a revised sales strategy and innovative alternative payment methods (e.g. USSD shortcodes).

• PEG has partnered with BIMA to reward loyal customers in Ghana with free medical insurance covers

KPI 2017

1 Number of systems sold (K) xx

2 Customer savings ($, M)1 $14M

3 Hours of clean lighting (M / month)2 3.7M

4 Carbon reduced - cumulative (tons)2 31k

5 Jobs created (FTEs) 130

Pending finalized 2017

reporting

Sector 2016Investment

DateGhana, Ivory

CoastGeography

Step 2: Monitoring at the company level

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Confidential

Annual Revenue Generated $80M People Employed

(FTEs) 1,000

New Customers Acquired (Annual)

400kCumulative Customers

Served1.5M

TOTAL PORTFOLIO KPIs

Step 3: Evaluating at the portfolio level

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Confidential

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CompanySustainable

Development GoalsSample Metrics

• Industry-related GHG emissions• Share of energy from renewables

• Share of population with reliable energy• Share of population with access to

renewable energy

• Access to financial services• Gini coefficient

• Youth employment rate• Average income• Human mobility governance index

• Share of population with reliable energy• Share of population with access to

renewable energy

Step 4: Communicating to peers

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Questions?

Sarah WilsonDirector, Responsible Investing

Nuveen, A TIAA Company

Michael EddyVice President

Global Innovation Fund

Grace HorwitzAssociate

Blue Haven Initiative

@theGIIN

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Thank you!

Rachel Bassrbass@thegiin.org

www.thegiin.org/

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Investors use evidence and tools to set strategy

73%

51%

25%

10%

18%

74%

20%16%

7%

20%

We select them based onthe existing evidence we

used to develop ourstrategy (e.g., theory ofchange or logic model).

We select them based on arating system, index,

analytics tool, or othersystem (e.g., IRIS).

We select them based onthe Sustainable

Development Goals.

We select them based onregulatory and/or taxcredit requirements.

Other

Perc

ent

of

resp

on

den

ts

Impact metrics Impact targets

Ways to select impact metrics and targets

n = 146 n = 106Source: GIIN