Impact Investing Due Diligence Guide

This guide on impact investing is based on the McConnell Foundation’s internal due-diligence process and it offers a framework to assess impact and financial risk and return of potential investment opportunities. The expected added value is in how to incorporate impact and strategic fit dimensions when assessing investment opportunities with an impact investor lens. It should be noted that the shared list of questions is not exhaustive and readers should refer to other manuals for more comprehensive financial due-diligence and analysis of different asset classes. It can be considered a work in progress as the market continues to evolve and we continue to learn about new developments in impact investing.

In 2012, the McConnell Foundation developed an impact investing policy that would enable it to advance its mission of engaging Canadians in building a more innovative, inclusive, sustainable and resilient society. The portfolio that the Foundation seeks to build and maintain is made up of investments across asset classes and across the range of domains in which it executes its mission.

The portfolio management tools that the Foundation has developed were created to enable this diverse approach to investing. It is important to note that some of the
questions and considerations presented in this Due Diligence Guide might not be relevant for investors who are building more targeted funds or who work in one domain instead of many

The Due Diligence Guide is divided into two parts. This document, Part 1, covers the general methodology and provides a set of due diligence questions that may be raised when assessing impact investing opportunities, which includes a non-exhaustive set of questions for due-diligence of traditional investments.

Part 2, covers in more depth the analysis and scoring system that the Foundation uses to build and assess individual risk-and-return profiles of potential impact investments.

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