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IV. Additionality

Project Frame’s updated definition of additionality is:

An attribute of impact requiring an investor or company's thoughtful and reasonable articulation of the degree to which its support causes a change in an outcome that would have not otherwise happened (in a no-intervention or business as usual baseline scenario).

Applications of additionality vary significantly depending on the focus of assessment. To begin distinguishing applications, Frame currently describes two classes and associated sub-classes of additionality in the following table.

Additionality is among the most debated topics, in part for its subjectivity. Today, Frame does not provide specific methodological guidance. Instead, our goal is to develop a common language within the Frame community that enables investors to advance their strategic approach. Prime Coalition’s white paper on additionality recommends, "To demonstrate additionality, a project description generally includes the following: A narrative that describes the types of additionality present, supported by information that demonstrates the judgment based on market knowledge and/or available information."

	Investor-Level What if a specific investor did not fund this company?		Enterprise-Level What if this specific enterprise (company or project) did not exist?
	Financial Additionality	Value Add Additionality	Performance Additionality	Adoption Additionality
Description	Impact that would not have happened without an investment by a fund with a mandate that deviates from market standard	Impact that would not have happened without unique non-financial value an investor provides to a portfolio company	Impact that would not have happened without the company creating or improving a solution with a unit impact that is superior to alternatives	Impact that would not have happened (in the same timeframe) but for the increased adoption of a solution
Example: Early-stage Investments	An impact investor steps in to lead the round for a company that has been attempting to raise for more than two years, but has been rejected by other investors due to high technical risk.	An impact investor makes the strategic decision as a board member to allocate R&D resources towards developing a product with higher climate impact.	A company develops a novel chemistry for metal extraction that has lower emissions than existing technology. In early-stage companies, enterprise-level additionality can be thought of as “solution-level.”	A company produces green methanol at lower cost than existing green methanol producers, reaching cost parity with fossil methanol and growing the market for green methanol.
Example: Later-Stage Investments	An impact investor agrees to join the syndicate and fill out a large round that otherwise would not have been completed.	An impact investor leverages its network to help the portfolio company secure off-takers for its products with green premium.	A battery recycling company improves the established process to further reduce emissions. In later-stage, company-level additionality may not be “solution-level” when it accounts for competition between solution providers	A solar developer expands its operation into a new geography that currently has low solar adoption.