With each investment, ARUN endeavors to attain a deep understanding of the background and aspirations of the investee, as well as of how he/she aims to change society through business. We also share in the entrepreneur’s challenges through the investment.
Therefore, ARUN’s social impact evaluation puts the investee business’s goals as the basis of the evaluation framework and develops a unique monitoring index for each investment.
Businesses in emerging economies often make daily decisions in an environment of choices limited by, for example, a lack of trained personnel or of the opportunity for technological improvements. We have learned that the evaluation framework must be flexible to accommodate these circumstances.
When an investee company is forced to make adjustments to their business plans, we must not insist on sticking to the existing index, but have the flexibility to go back to the drawing board, change course and allow the entrepreneur to use the index for his/her own reference.
In our eagerness to see social impact, we can fall into the trap of requiring entrepreneurs to formulate numerous indices and thereby placing undue burden on them. We have learned through our relationships with investees that rather than be bound by the “shoulds,” we must clearly indicate what is non-negotiable – which the truly important indices are – and come to an agreement on them.
As the perception of social impact depends on the recipient’s expectations, we must search for methods that balance subjectivity and objectivity. With eight years under our belt, ARUN has a better understanding of our investees’ management skills and the circumstances that are unique to each sector, and have developed the competence to work effectively in these environments. With these experiences, we are able to conduct monitoring and evaluation while continuing our conversations with the investees.
ARUN is developing evaluation methodology to measure and visualize social impact.
Together with Japan International Cooperation Agency (JICA), we have developed methodology to measure the development impact of BOP businesses. Download from here. (only Japanese)
In 2015, ARUN released an impact report in which it summarized five years of social impact evaluation that ARUN had undertaken from the time of its establishment as activity that is crucial to the growth and advancement of social investment. We encourage you to read this report and look forward to receiving your honest and frank comments. We hope this report will stimulate your interest in social investment and inspire you to participate in ARUN, working with us to further the development of social impact evaluation. It is our fervent desire to contribute to the advancement of social investment in Japan and globally, and to the development of a new society.
Click here to download the report. (only Japanese)