Announcement of Publication of Case Study Co-authored with Impact Frontiers

Impact Circle Inc. (Headquarters: Minato-ku, Tokyo; President and CEO: Satoshi Takahashi; hereinafter referred to as "Impact Circle") is pleased to announce that the case study "Reporting Norms Case Study: How QR Investment got started with qualitative approaches to impact reporting," co-created with Impact Frontiers, has been published on the Impact Frontiers website.

Impact Frontiers is an international non-profit organization that promotes peer learning and market building to support investors in properly managing social and environmental impact and incorporating impact perspectives into investment decision-making. In addition to developing and disseminating norms for impact management, they provide practical tools and learning opportunities for investors, and organize and disseminate practical knowledge regarding impact measurement, management, and reporting.

This case study introduces a practical example of qualitative impact assessment and reporting processes supported by Impact Circle, focusing on QR Investment Co., Ltd.'s impact fund "Noto Beyond Reconstruction Fund," established to support the reconstruction of the Noto region. In particular, it focuses on initiatives to visualize regional changes and the social value created by the fund, which cannot be fully captured by quantitative data alone, through interviews with investee companies and regional stakeholders.

Impact Frontiers Case Study: https://impactreporting.org/report/how-qr-investment-got-started-with-qualitative-approaches-to-impact-reporting/

1. Background and Objectives

In recent years, impact investing has increasingly demanded transparent explanations of the social and environmental changes generated by investment activities, in addition to financial returns. However, in areas such as regional revitalization and reconstruction support, where outcomes emerge in a multifaceted and long-term manner, it can be difficult to fully explain impact solely through quantitative data.

The "Impact Performance Reporting Norms" promoted by Impact Frontiers highlight the importance of combining quantitative and qualitative information in impact reporting. Qualitative information plays a crucial role in understanding stakeholder perceptions, the background and context of changes, and unintended consequences.

Against this backdrop, this case study uses the initiatives of QR Investment Co., Ltd.'s Noto Beyond Reconstruction Fund, rooted in the Noto region, as a subject to organize practical methods for qualitative impact assessment in regional finance and impact investing, and their significance.

2. Case Study Overview

QR Investment Co., Ltd. established an impact fund in 2024 following the Noto Peninsula earthquake, with the aim of supporting the reconstruction of the affected region and its sustainable development. Through investment in startups and small and medium-sized enterprises in the Noto region, the fund aims for "creative reconstruction" that goes beyond mere restoration.

Impact Circle provided the following support to the impact fund:

Clarification of the social value the fund aims to achieve

Development of Theory of Change and Logic Model

Design and implementation of stakeholder interviews

Organization of qualitative impact based on interview results

Support for creating an "Impact Story" for LPs and regional stakeholders

This case study presents the process of visualizing the changes that the fund's investment activities are bringing to the region, based on voices gathered from multiple stakeholders, including investee companies, regional businesses, new residents, and local government officials.

3. Key Points Demonstrated in This Case Study

Visualizing Regional Changes Uncaptured by Quantitative Data Alone

In the context of regional reconstruction and revitalization, it is important to grasp not only quantitative indicators such as sales, employment, and visitor numbers, but also the changes that regional residents and stakeholders perceive. This case study organizes changes that are difficult to quantify, such as the expansion of new activities in the region, connections between businesses, and changes in the awareness of people involved in the region, through stakeholder interviews.

Transforming Impact Reporting from Mere Explanatory Material to a "Dialogue Tool with the Region"

The Noto Beyond Reconstruction Fund initiative created an "Impact Story" in addition to an impact report for LPs, which could be easily understood by regional residents and local government officials. The aim was to create a communication tool that not only reports the fund's activities to investors but also allows local people to understand "what is happening in their region" and fosters empathy and collaboration towards reconstruction.

Potential for Use in Investment Decisions and Due Diligence

Qualitative impact assessment can be used not only for post-investment reporting but also for investment decisions and support for investee companies. This case study indicates that QR Investment will incorporate stakeholder perspectives in the future during the investment consideration phase, to confirm the social issues founders are trying to solve and the changes they aim to create.

4. Future Developments

Leveraging the insights gained from this case study, Impact Circle will further expand its support for visualizing impact and impact management for regional financial institutions, impact funds, businesses, and local governments. Particularly in the areas of solving regional issues and supporting reconstruction, it is crucial to carefully collect and analyze the voices of regional stakeholders and visualize the structure of social value, in addition to quantitative performance indicators.

Impact Circle will support impact communication that helps companies, financial institutions, and regions re-recognize the significance of their initiatives and generate greater empathy and collaboration through the development of Theory of Change, construction of logic models, stakeholder interviews, and support for creating impact reports.

Impact Circle

Company Name

Impact Circle Inc.

Established

July 29, 2021

Head Office Location

Sumitomo Fudosan Shiba Park Tower 16F, 2-11-1 Shiba Park, Minato-ku, Tokyo

Representative

Satoshi Takahashi, President and CEO

Main Business

- Provision of impact visualization services/platforms

- Provision of impact visualization finance

<Contact Information>

Impact Circle Inc.

Contact: Kato

TEL: 03-6757-4532

E-mail: info@impact-circle.co.jp

URL: https://impact-circle.co.jp/