The act of recognising and awarding a qualifying applicant with status as an Authorised Impact Representative (AIR) including either or both that of an Impact Verification Agent (IVA) or Nominated Impact Advisor (IA).

Representing an organisation through articulating the mission and supporting and defending the organisation’s message.

An individual (typically a high net worth individual or entrepreneur’s family and friends) who provides iniital high risk capital for a start-up enterprise, usually in exchange for some stake in ownership equity. The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times.

An official statement of creation of an organisation; it is filed with the appropriate state agency.

Also known as the Bottom of the Pyramid (BoP). The bottom of the economic pyramid, which represents the largest, but poorest, socioeconomic group generally living in emerging markets. In a global context, the economic base of the pyramid refers to the approximately 4 billion people living on less than $2 per day.

South African government policy designed to economically empower disadvantaged groups. It includes an emphasis on Enterprise Development (ED) and Socio-Economic Development (SED), which provide potential funding sources for qualifying social enterprises.

An integrated approach to investments by taking economic, social, and environmental values, profits and impacts into account.

Bonds are financial instruments for debt. National governments, local governments, utility providers, companies and many other types of institutions sell (and buy) bonds. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically. Bonds are commonly referred to as fixed income securities and are one of the three main asset classes, along with stocks and cash equivalents. 

A process used by an underwriter to determine the demand and the price that investors will pay for a share during an initial public offering (IPO).

Capacity building refers to investments in the development of a person (skills development) or organisation, equipping the individual or organisation to execute its mission more effectively. It includes things like staff development, facilities, strategic-planning, information systems and technology improvements.

Assets given to an individual or organisation to help the individual or organisation execuite its mission effectively.

Capital structure refers to manner in which a company finances its assets, typically through a combination of debt and equity, or some hybrid structure.

A place where a financial company can deposit securities. CSD sometimes also offer services that help facilitate the tracking, transfer, clearing and settlement of securities.

A document usually issued by a government authority, such as a secretary of state, documenting when and where a legal entity has been formed and its full legal name.

The process whereby trades on a public stock exchange are matched, cleared and settled, so that the buyer can get the securities and the seller obtain the money from the securities.

CDFIs are financial institutions created to reduce poverty in economically depressed areas, typically through providing credit, financial and other services to underserved markets or populations, mainly in the U.S. and U.K.

The act of conforming to legal, accounting and regulatory requirements.

An instrument used by providers of patient capital. Convertible grants and loans require repayments or equity only if the enterprise is succeeding and growing above a certain level. They can be structured in many different ways.

A corporate adviser is the guardian of a listed company’s compliance with the SEM's listing requirements and other applicable regulation. Their main role is to competently, professionally and impartially advise the applicant company on all its responsibilities during the application process and its responsibilities to maintain its status once listed. An advisor's responsibilities to the SEM include: (a)     advise and guide the directors of an iX company, for which it acts, about their obligations to ensure the iX company complies with these rules on an ongoing basis; (b)     provide the SEM with any other information, in such form and within such time limits as the SEM may reasonably require; (c)     liaise with the SEM where requested to do so by an iX company for which it acts; (d)     inform the SEM when it ceases to be the corporate adviser to an iX company. This role may be fulfilled by an accredited and qualified NIA.

An area of finance that encompasses a corporation's monetary decisions and the tools and analysis used to make those decisions.

This is the South African equivalent of corporate giving or corporate philanthropy. It does not constitute social investment linked to a financial return, but rather the social benefit and enlistment that are based on the investment. This type of investment can be in the form of grants, in-kind donations, mentorship and volunteerism.

This is defined as the integration of business operations and values, where the interests of all stakeholders—including investors, customers, employees, the community, and the environment—are reflected in the company’s policies and actions. Particular attention is given to corporate practices as they relate to environmental, social, and governance (ESG) performance.

A relationship between a non-profit and a company; the non-profit receives monetary support, goods, or services in exchange for public recognition of the company.

Is one component of CSR. Refers to a company's corporate philanthropy or corporate giving.

A measure of the amount of outcome that would have happened even if the activity had not taken place.

A merger, sale, or agreement in which one party presents the other party with terms and conditions. 

An amount owed to a person or organisation for funds borrowed. Debt can be represented by a loan note, bond, mortgage or other contract type stating repayment terms and, if applicable, interest requirements. These different forms all require the debtor to pay back the amount owed by a specific date, and according to specified terms, all of which are set out in the debt agreement.

The ratio of shareholders’ equity in the company (share capital and reserves) to company borrowing. The company has two primary sources of capital: shareholders equity (consisting of the money raised when the shares they hold were issued, plus any profits which have not been distributed as dividends); and money obtained in the form of loans from banks and other lending institutions. The Debt/Equity Ratio shows who owns what in the business. For example if shareholders had only R1 for every R1.50 of the bank’s then the company would be 'highly geared' and in danger of going beyond its credit worthiness. This means that the bank would effectively control the company by being able to close it down by simply calling in its loan.

Required repayment of principal and interest for a loan, usually expressed annually.

Domestic or international organisations that provide funding to enterprises, municipalities or organisations that are specifically advancing development goals.

A process where all material facts related to a potential investment or agreement are thoroughly investigated. This often includes reviewing all financial and corporate governance records plus anything else deemed material to the investment. In the diligence processes for impact investments or socially responsible investments, specific attention would also be given to measuring the social and environmental impact in order to assess performance and capacity to deliver according to the stated social mission.

The simultaneous pursuit of a social enterprise or business to achieve financial, social and/or environmental returns on investment.

A process where all material facts related to a potential investment or agreement are thoroughly investigated. This often includes reviewing all financial and corporate governance records plus anything else deemed material to the investment. In due diligence processes for Impact Investments or Socially Responsible Investments, specific attention would also be given to assessing the social and environmental impact to assess performance and capacity to deliver according to the stated social mission.

A term coined in 1981 by Antoine W. Van Agtmael of the International Finance Corporation of the World Bank, an emerging, or developing, market economy (EME) is defined as an economy with low to middle per capita income. Such countries constitute approximately 80% of the global population, representing about 20% of the world's economies. Emerging market economies are characterised as transitional, meaning they are in the process of moving from a closed to an open market economy while building accountability within the system.

Refers to the environmental, social and governance practices of an organisation. These are often used as a framework for assessing the practices of an organisation for consideration as a socially responsible investment. Analysis considers performance and risk in the areas of community, customers, corporate governance, employees, environment and human rights.

Equity investments consist of preferred and common stock, where investment into a company is made via the purchase of the company’s stock. Equity constitutes ownership interest in an enterprise or company and consequently involves risk, and a share in any profit or loss the company may make.

A way for an equity investor to sell his/her securities (shares or bonds) and end involvement with the enterprise.

Paying a fair rate for goods and products when trading with businesses in the developing world.

A responsibility of board members and the non-profit board as a whole to ensure that financial resources of an organisation are sufficient and handled properly.

A consultant to an issuer who provides advice with respect to the structure, timing, terms, or other similar matters concerning a new issue.

An examination and verification of a company’s financial and accounting records and supporting documents by a registered Auditor applying Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The audit, prepared as of a certain date usually covering a fiscal year, includes an opinion letter, statement of financial position (balance sheet), statement of activities (income statement), statement of cash flows, and notes. An auditor can have an unqualified opinion, stating that the organisation appears to have followed all accounting rules appropriately and that the financial reports are a reasonably accurate representation of the company’s financial condition, or a qualified opinion, highlighting certain compliance issues or limitations in the company’s statements.

Financial intermediaries consist of (I) central bank; (ii) deposit taking corporations other than central bank (e.g. banks); (iii) money market funds; (iv) investment funds other than money market funds; (v) other financial intermediaries, except insurance companies and pension funds; (vi) insurance corporations and (vii) pension funds. However, for the purposes of excluding debt between related financial intermediaries, insurance corporations and pension funds are not considered “financial intermediaries”.

The communication of a wide range of financial and other data to interested parties.

The financial regulator in South Africa.

The financial regulator in Mauritius.

A written report that quantitatively describes the financial health of an organisation. A complete financial statement includes a balance sheet, income statement, statement of cash flows, and often a statement of functional expenses. Financial statements are usually compiled on a quarterly and annual basis.

A public or private organisation that is allowed to distribute profits to shareholders or directors.

The legal authority of a board to establish policies that will affect the life and work of the organisation while holding the board accountable for the outcome of such decisions.

Contributed assets (usually financial) given by an individual or another organisation with no reciprocal receipt of services or goods or financial return on the grant. Sometimes grants are given with legal restrictions imposed upon their use.

A business that operates at the base (or bottom) of the pyramid. A grassroots business typically operates in an emerging market; it has limited levels of operational sophistication and formal processes, as well as a lack of access to developed markets or protocol for running and operating a business.

Influencing legislation indirectly by attempting to mold the general public’s opinion on an issue.

Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations.

A methodology of economics that supports the harmonious interaction between humans and nature and attempts to meet the needs of both simultaneously. The green economic theories encompass a wide range of ideas all dealing with the interconnected relationship between people and the environment. Green economists assert that the basis for all economic decisions should be in some way tied to the ecosystem.

Outcomes that are clear and obvious, or which involve an external change in people’s behaviour or circumstances.

High impact businesses have social and/or environmental missions and purposes. They are for-profit companies that create economic opportunities at the base of the pyramid (GBF).

A variation on social venture funds/venture philanthropy, with the exception that the investors themselves engage directly with the social enterprises through volunteering and/or consulting.

Institutional foundations using new models of philanthropic engagement to be directly involved in social value creation, investing time and talent as well as money.

The systematic recording, reporting, and analysis of the socio-economic and/or environmental impact of a business through its operations. Impact accounting allows a company to analyse the socio-economic and/or environmental performance of the business, and review impact metrics.

Impact Advisors may be a company, partnership, sole proprietor, corporate brokers, bank or other professional intermediary advisors, asset or fund managers, accountants or specialist consultant with sufficient skill and experience to execute the responsibilities of the IA. Their main responsibility is to competently, professionally and impartially advise the applicant company on all of its responsibilities related to Impact (and the achievement thereof) during the application process and its responsibilities to maintain its status once listed.

The examination and evaluation of relevant information in relation to specified socio-economic and/or environmental impact to inform and facilitate the selection of the best course of action from various alternatives.

An unbiased examination and evaluation of the impact statements of a social business. It can be done internally (by employees of the organisation) or externally (by an outside firm).

Investment into a high impact business.

A private placement platform operated by Nexii.

A public board for listed securities as operated by the SEM.

An investment strategy whereby an investor proactively seeks to place capital in businesses and projects that generate financial returns as well as intentional social and environmental impact.

Investments that seek to generate both a financial return and social and/or environmental value. Financial returns range from a minimum of returned capital to market related returns. Impact investing departs from the more mainstream ‘socially responsible investing’, which focuses primarily on avoiding ‘undesirable’/‘unethical’ investments or encouraging improved corporate practices related to ESG factors. Impact investing in contrast, takes a more proactive approach, consciously seeking to place capital (including equity, debt, lines of credit and loan guarantees) in businesses and funds that can provide solutions to social and environmental challenges at scale.

A table that captures how an activity makes a difference: that is, how it uses its resources to provide activities that then lead to particular outcomes for different stakeholders.

Standards or systems of measurement specific to measuring the socio-economic and/or environmental impact of activities and whether, or to what extent, the specific goals and objectives of these activities have been met.

A grant platform as operated by Nexii.

The accomplishment of a given task measured against planned activities and impact metrics or the demonstrated, evidenced fulfilment of the stated goals and objectives.

An impact profile provides a broad overview of the mission, purpose, nature of business, and Theory of Change of a high impact business or impact investment fund.

Impact rating is an Investing for Good term used to rate social investments, and relates to an organisation’s mission and its delivery thereof. Factors considered in impact rating include the presence of a clear mission statement; the level of social auditing; whether the nature of the operation's activities are direct or indirect; the gearing of funds; and its attitude to profit.

An Impact Verification Agent (IVA) is the equivalent of an auditor but has specific expertise, and focuses on the assessment and verification of the social or environmental impacts and social return on investment reported by an iX company. A NIA may act as an independent IVA provided that the NIA is not retained on a continuous basis by the iX company and/or does not act as corporate adviser to the iX company under rule 35.

The initial listing of an enterprise's stock on a regulated stock exchange.

An organisation (as opposed to an individual) that invests funds arising from deposits, premiums etc. Examples are insurance companies, mutual funds and investment trusts.

Smaller changes that happen as steps on the way to the main outcome.

Provide advice and support to high impact businesses, either helping them to meet the criteria for listing on a Nexii platform or verify a high impact business' impact reports provided on an annual basis. Nexii accredits and works along side such intermediaries, called Authorised Impact Representatives (AIRs).

For non-financial companies, the sum of total shareholders equity and net debt. For microfinance, total assets minus total deposits.

Traditionally, the term “investment” has been used to refer to capital investments in search of market-rate financial returns. More recently, the term has also come to refer to any provision of capital in pursuit of value creation and returns. Therefore, investment may best be thought of as taking three forms: Market-Rate, Concessionary and Philanthropic. Additionally, “investment” has increasingly been broadened to include both financial and non-financial capital. Put simply, human capital, such as time, talent and network deployed alongside recoverable and unrecoverable financial capital to create value.

An individual or organisation placing capital into an organisation (whether for-profit or non-profit), creating blended value. Examples of investors include foundations, individual donors, investment funds, socially responsible mutual funds, individual community development finance funds and pension funds.

A company with a class of securities listed on the Impact Exchange Board (iX).

A director of an iX company.

The fees charged by the SEM to iX companies in respect of listing and annual fees.

The securities of iX companies, which have been listed.

A specific project or event conducted by two or more non-profits, or a non-profit and for-profit corporation.

Key Performance Indicators (KPIs) are commonly used by a social business to evaluate its success or the success of a particular activity in which it is engaged.

A measure of how much cash and assets readily convertible to cash (such as marketable securities) an organisation has available. Can also include the unused amount available on a line of credit.

A written evaluative report prepared by a high impact business or impact investment fund's Impact Advisor (IA), outlining key information on the applicant’s impact purpose, objectives and targets; key impact indicators, organisational structure, operations and capacity; governance practices, procedures and compliance and risk factors. This assessment is based on the IA's due diligence evaluation of the applicant and provides key information for investors using Nexii platforms to assess and understand the relative strengths and purpose of the high impact business or impact investment fund.

A well defined and significant step towards achieving a target, output, outcome or impact, allowing a group to track progress.

Net present value of the impact divided by total investment.

The Nexii Portal is an open access platform that serves all stakeholders in impact investing and aims to promote connection, education, advocacy and investment marketing support.

The registry on which all Nexii-accredited AIRs are listed.

A legal contract between two or more parties that symbolises a confidential relationship exists between party members, and that information shared between parties should not be made known to the public.

Structured capacity strengthening support services provided to complement and enhance the impact of financial support/investment. Components of non-financial support may include mentorship programmes, technical skills training programmes and business advice.

This sector is a collection of entities that are organisations; private as opposed to governmental; non-profit distributing; self-governing; voluntary; and of public benefit.  

Areas of activity or practical steps a project or organisation plans to accomplish.

Unrestricted access to information.

Changes resulting from an activity. The main types of change from the perspective of stakeholders are unintended (unexpected) and intended (expected), positive and negative change.

Traditionally associated with equity-type investment within the private sector, it is being interpreted within the social investment space as ‘mezzanine-type’ finance that is a stage between a grant and a loan. With patient capital, the investor is willing to make a financial investment in a business with no expectation of turning a quick profit. Instead, the investor is willing to forego an immediate return in anticipation of more substantial returns later.

Principal is the original sum of money invested or loaned, or the amount owed on a debt.

Equity capital that is made available to companies but not quoted on a stock market. The funds raised through private equity can be used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company’s balance sheet.

The process whereby investors invest directly in an investment without using a public exchange. Private placement deals may be cleared and settled by a clearing agent.

The ability of a business to generate a profit.

An investment made by a US-based foundation that qualifies as a charitable expense under the tax code, allowing the foundation to include the investment as part of the 5% of assets it must distribute philanthropically each year.

A practice by pension funds to invest in a social and/or environmentally conscientious manner.

The Stock Exchange of Mauritius Ltd. established under the repealed Stock Exchange Act 1988.

Any individual, business or institution that hold one or more shares in a public or private business or fund. Also referred to as a stockholder.

Shareholder Advocacy is a strategy for socially responsible investment practice and represents the action taken by shareholders whereby they strategically engage with companies on key issues to encourage positive change in companies’ social and environmental policies and practices. This may involve filing shareholder resolutions.

Many institutions and countries define SME differently, but often the size of an enterprise is determined by the number of employees or the annual sales generated by the business.

Social and ethical accounting and auditing are all methods of measuring and reporting on an organisation’s social and ethical performance. Ideally, an organisation that takes on an audit makes itself accountable to its stakeholders and commits itself to following the audit’s recommendations.

A social business is a business with social or environmental objectives whose surpluses are principally used to maximise financial return for shareholders and owners.

A social business meets these four indicators: a) Primacy of social or environmental purpose and intent b) Clear purpose and Theory of Change c) Performance measurement and monitoring systems d) A sustainable business model and a market orientation

An entrepreneur or organisation that pursues a double or triple bottom line business model, either alone (as a social sector business) or as part of a mixed revenue stream that includes charitable contributions and public sector subsidies.

The measurement and assessment of the effect of implemented activities on the social fabric of communities and the quality of life of individuals and families within communities. This can be used to assess the effectiveness of an investment against its aims and objectives and as a tool for implementing organisations to review, assess and adapt their models and programmes according to feedback and lessons learnt.

Social investing is a term with many uses, but it generally refers to investing that considers social and environmental issues. Social investing includes investments made with the intention of having a positive impact, investments that exclude “harmful” activities, and investments that are driven by investors’ values and don’t necessarily correspond to having a positive social or environmental impact. Impact investing is a subset of social investing; it refers only to the social investing that actively seeks to have a positive impact.

Social performance refers to an organisation's direct input, output, and business activities that are designed to have a positive social or environmental effect.

A social purpose enterprise is typically a revenue-generating venture founded by a non-profit to create jobs or training opportunities for very low-income or otherwise disadvantaged individuals, while simultaneously operating with reference to the financial bottom-line. Although less common, a social purpose enterprise can also be founded by a for-profit social enterprise.

Non-financial data covering staff issues, community economic development concerns, stakeholder involvement and related social activities and impacts of an organisation (whether for-profit or non-profit). Social reporting may include voluntarism and environmental performance metrics.

The idea that businesses should not function amorally, but instead should contribute to the welfare of their communities.

SROI is an approach to understanding and managing the social impacts of a project, organisation or policy. SROI seeks to provide a fuller picture of how value is created or destroyed through incorporating social, environmental and economic costs and benefits into the decision making process.

Funds that invest in social enterprises using methods similar to venture capital firms. Most notably these groups practice high engagement with investees (whether for-profit or non-profit), maintain longer investment horizons and have a clearly enunciated focus upon outcomes and documented social return on investment.

Social housing is an umbrella term referring to rental or cooperative housing which may be owned and managed by the state, non-profit organisations, or by a combination of the two, usually with the aim of providing affordable housing for the economically disadvantaged, but generally those who do have some form of sustainable income.

SRI historically described investing in companies, typically through publicly traded securities, that favour strong environmental and social governance (ESG) policies and avoid investment in businesses involved in industries such as alcohol, tobacco, gambling and weapons. While socially responsible investors continue to rely primarily on public equities' 'screening', some also take active positions in voting proxies and engaged management to promote social causes.

Outcomes that are less easy to observe or measure, or which involve some form of change inside people, such as a change in attitude or a change in the way they see themselves.

A stock exchange or stock market is an organised and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Stock exchanges basically serve as (1) primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channelling savings of the investors into productive ventures; and (2) secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system. Stock exchanges impose stringent rules, listing and statutory requirements that are binding on all listed and trading parties. Trades in the older exchanges are conducted on the floor (called the 'trading floor') of the exchange itself, by shouting orders and instructions (called open outcry system). On modern exchanges, trades are conducted over telephone or online. Almost all exchanges are 'auction exchanges' where buyers enter competitive bids and sellers enter competitive orders through a trading day. Some European exchanges, however, use 'periodic auction' method in which round robin calls are made once during a trading day. The first stock exchange was opened in Amsterdam in 1602; the three largest exchanges in the world (in descending order) are the New York Stock Exchange (NYSE), London Stock Exchange (LSE), and the Tokyo Stock Exchange (TSE). See also exchange.

Sustainability or sustainable development (SD) is a pattern of resource use that aims to meet human needs while preserving the environment for present and future generations.

Sustainability measurement is a term that denotes the measurements used as the quantitative basis for the informed management of sustainability.

Sustainable value is a way of managing and measuring sustainability performance.

The generally accepted definition for sustainable development was proposed by the United Nations: To meet the needs of the present without compromising the ability of future generations to meet their own needs. The term is sometimes used interchangeably with sustainable consumption and production.

A methodology, designed to create the positive impact that social and environmental purpose businesses and other impact entities are interested in pursuing. A company's Theory of Change sets out its vision of success and identifies which stakeholders are needed to do what in order to achieve it. It is a specific and measurable description of purpose that defines the company's long-term goals, forms the basis of activities to achieve those goals (outputs) and identifies measurable indicators of success to measure progress and performance (outcome indicators). A Theory of Change is based on the articulation of various assumptions that the company uses to explain the change process and the expectations about how and why proposed interventions will bring about this change or impact in the long term.

The term ‘triple bottom line’ is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters.

Triple bottom line accounting means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance.

A state of inadequate economic development, often accompanied by a lack of access to job opportunities, health care, education, drinkable water, food and housing.

A process used to analyse the financial condition of an organisation and its project (where applicable) in conjunction with the terms and conditions of a loan and the ability of a loan applicant to meet those terms and conditions. See credit analysis.

An unlisted debt or equity is a stock that is not traded on an exchange; this is usually because it has not sought to be listed, does not meet the listing requirements of the exchange, or it is too small or unstable to trade. Brokers or dealers usually negotiate directly for unlisted debt or equity.

A platform that is not regulated by the relevant public regulatory bodies or authorities, such as the FSC or FSB.

Start-up or growth equity capital or loan capital provided by private investors (the venture capitalists) or specialised financial institutions (development finance houses or venture capital firms). Also called risk capital.

A pooled investment that uses the money from third-party investors, such as investment banks or wealthy investors, to invest in business projects. Businesses that seek venture capital often carry more risk, and are either unwilling to pay the interest on bank or market loans or are unable to obtain them.

The process of establishing the truth, accuracy, or validity of something typically using empirical means that would validate a proposition. The use of supplementary tests in the comparision of two or more results to ensure the accuracy, correctness, or truth of the information.

A written description of the ultimate desired end goal purpose or achievements of an organisation.