• you cannot manage what you do not measure

     

WHAT IS IMPACT?

Impact is a change in human well-being due to a positive or negative outcome for people or the planet driven by the activity of an enterprise.

To understand any impact, we need to understand the five operational dimensions of the social performance of a corporation, and its four capital dimensions.

In line with the recommendations of Impact Management Project, we recognize the following five operational dimensions of impact: What, Who, How Much, Contribution and Risk.

MEASURING YOUR IMPACT

What tells us what outcomes the enterprise is contributing to and how important the outcomes are to stakeholders. Stakeholder outcomes include outcomes for third-parties which would typically not have been considered or priced by an enterprise while undertaking an activity: these are called ‘externalities’.


Who tells us which stakeholders are experiencing the outcome and how underserved they were prior to the enterprise’s effect. Stakeholder groups could be private parties (individuals and firms), or communities, or the public at large. They could be close to the driver of the outcome (e.g., land pollution) or very distant (e.g., GHG emissions).


How Much tells us how many stakeholders experienced the outcome (“scale”), what degree of change they experienced (“depth”), and how long they experienced the outcome for (“duration”). The present values of these outcomes can be expressed as changes to one of four capital classes: natural, human, social and financial.


Contribution tells us whether an enterprise’s and/or investor’s efforts resulted in outcomes that were likely better than what would have occurred otherwise. The extent to which impacts of a particular business either exceed or fall short of prevailing sectoral benchmarks represents the contribution of that business. These shortfalls or excesses can often be valued economically and expressed in terms of the same four capital classes – financial, natural, human and social.


Risk tells us the likelihood that impact will be different than expected. Since all impact valuations are estimated as the present value of future changes in human well-being, there is every likelihood that actual impacts will differ from estimates as future changes diverge from expectations. This divergence is ‘risk’ and can sometimes be expressed as the standard deviation of return or of contribution.

BENEFITS OF IMPACT MEASUREMENT

 

Corporates

Four capitals impact assessment enables corporates to identify and measure the impacts of material non-financial risks to their business operations and value chain. This enables companies to be ‘future-ready’ in a VUCA world.
e.g. setting carbon price in anticipation of evolving regulatory risks.

Impact measurement allows corporates to:
Measure performance across key environmental indicators on an on-going basis.
Identify material non-financial risks for relevant industries.
Measure & size the cost of non-financial risks to their operations & value chain.
Establish business sustainability by mitigating negative risks via investments in technology / reliable value chain partners.
Strengthen its ‘social license’ by demonstrating value creation to society and stakeholders.

 

Funds

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Investors & Banks

Four capitals impact assessment enables investors and banks to identify and measure the impacts of material non-financial risks to their investments in a manner which is free of subjective-bias (non-scientific ranking) and one which provides cross-comparability across and benchmarks within sectors.

Impact measurement allows investors and banks to:
Identify material non-financial risks for relevant industries.
Measure and size the cost of non-financial risks to their investments.
Develop robust metrics and practices for investments – e.g., differential lending rates based on sustainability / ESG performance.

 

Governments

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Academics

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Policy Makers

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Policy Makers & Regulators

Four capitals impact assessment enables regulators to extend their focus beyond guidelines for only financial disclosure to include measurement of the impacts of material non-financial risks. This is vital for ensuring that the industry is able to mitigate high non-financial risk, which can lead to disruption of business activities and impact investors.

Impact measurement enables regulators to:
Demonstrate the impact of policies on direct and indirect beneficiary wellbeing.
Identify material non-financial risks for relevant industries.
Enable policymakers to define key objectives and set targets for public policy.

 

Accounting Bodies

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NGOs

Four capitals impact assessment enables NGOs to measure the economic value of impacts of their activities on beneficiary well-being. By developing robust quantitative and qualitative metrics, it allows NGOs to track performance and demonstrate the value that they generate for society and for investors.

Impact measurement allows NGOs to:
Develop robust frameworks for estimating economic value and generating social returns on investment (SROI) metric.
Measure performance and demonstrate the value that it creates for target stakeholders.
Enable comparison between projects based on weighted-SROI index to capture full range of monetary and qualitative benefit.

 

IMPACT MEASUREMENT

Understanding how to effectively measure impact is critical to addressing the social and environmental challenges confronted by corporations, governments and society in today’s VUCA world. This requires information on both - key risk factors and quantum of risk - in order to enable business managers, policy makers and individuals design effective mitigation strategies.

Impact measurement captures relative changes (positive and negative) in stakeholder well-being, which are attributable to material activities, functions, policies and processes along the business value chain, regulatory domain and social intervention.

Presented in the form of economic value, quantifiable volumes and qualitative ranks; our impact measurement enables stakeholders identify, measure, value and manage their material risks and make informed choices.

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IP&LTM is a performance management framework integrated across all four capital classes that helps a company become ‘future-fit’: able to design appropriate responses to business opportunities and threats in an increasingly ‘VUCA’ world, drive sustainable growth and deliver measurable value to all stakeholders, not only to shareholders.

IP&LTM integrates costs & benefits of all significant positive and negative externalities, across all four major capital classes and enables our partners to communicate holistic annual performance using a comprehensive framework.

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Example: Changing the way Yarra Valley Water measures value


Click to Read More on YVW’s 2016 Integrated Profit & Loss IP&LTM Assessment

 

Natural Capital
Natural Capital consists of the limited stocks of physical and biological resources found on earth, and of the limited capacity of ecosystems to provide ecosystem services (TEEB (2010))

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Human Capital
Human Capital includes the knowledge, skills, competencies and attributes (e.g., health) embodied in individuals that facilitate the creation of personal, social and economic well-being” (OECD, 2001)

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Social Capital
Social Capital constitutes of the productive value of social connections, where productive is understood not only in the narrow sense of the production of market goods and services, but in terms of the production of a broad range of well-being outcomes
(Scrivens K., 2013).

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Financial Capital
Financial Capital comprises of all manufactured capital, such as buildings, factories, machinery, physical infrastructure (roads, water systems), as well as all financial capital and intellectual capital (technology, software, patents, brands, etc.)

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Who we are

We are a 15-year old international Sustainability Analytics, Solutions and Insights firm with Head Quarters in Nyon, Switzerland, Research facility in Mumbai, Technology Partner in San Diego and collaborators worldwide

We are a Globally recognized leader in sustainability metrics, analytics and insights. Our clients span across corporations, financial institutions, Non-profits, governments, academic institutions, think-tanks, Industry associations and other types of organizations.

We work at the intersection of Sustainability, Big Data Analytics, & Intelligent Computing. Our core analytics engine i360X is based upon over 30 person-years of research & data analytics, algorithms and methodologies that are derived from globally accepted and used methods, techniques and data bases. Our solutions have been peer reviewed by leaders in the field and implemented by clients world-wide.

OUR WORK

Below we have listed some of our prime partners:

 

Yarra Valley Water
Yarra Valley Water (YVW) is Melbourne's largest retail water utility, providing essential water and sanitation services to more than 1.8 million people. GIST Advisory has worked with YVW to help prepare its first Integrated Profit & Loss (IP&L) report in 2016 and demonstrate YVW’s contribution to social capital and liveability via its sustainability and community interventions.

 

Sveaskog
Sveaskog is Sweden's largest forest owner and sells saw-logs, pulpwood and biofuel. Sveaskog also works with land transactions and develops the forest as a venue for hunting, fishing and other nature-based experience. GIST Advisory has worked with Sveaskog to help prepare its first Integrated Profit & Loss (IP&L) report in 2018 and demonstrate the company’s contribution to Swedish society.

 

Conservation Wildlands Trust
Part of the Ashok Piramal Group, Conservation Wildlands Trust (CWT) is an initiative to promote community-based wildlife conservation in India. GIST Advisory works with CWT to measure the total economic value creation for beneficiaries and social return on investment (SROI) as result of its community health and skill training programs in the Pench Tiger Reserve area, in India.

 

AMATA
AMATA is a Brazilian forestry company that serves as a bridge between the forest and the consumer market, offering certified wood that is produced with social responsibility and guaranteed origin. GIST Advisory has worked with AMATA to help prepare its first Integrated Profit & Loss (IP&L) report in 2015.

Read Report >>
 

AkzoNobel
AkzoNobel is the leading paint and performance coatings manufacturer globally. GIST Advisory has worked with AkzoNobel to help prepare its first Integrated Profit & Loss (IP&L) report in 2014 for its Pulp and Performance Chemicals business in Brazil.

Read Report >>