Measure, assess and value
Understand current practice and performance to inform prioritisation and decision-making
Description
Following their preliminary identification of relevant impact topics,
Learn more about this process in Identify
organisations
A term used by the Platform to group enterprises, investors and financial institutions of all types. Source: Impact Management PlatformOrganisation
- Measurement, which involves choosing relevant metrics and collecting data (quantitative and qualitative)
- Assessment, which is about contextualising this data; and
- Valuation, which involves understanding the relative importance of impacts, to the organisation itself and to those it affects.
This combined set of information helps organisations to prioritise impact topics, and can be used to inform decisions about targets and action plans. See Set Targets and Plan for more information.
Measurement, assessment and valuation are repeated by the organisation over time in order to monitor its progress and assess its impacts
The effect(s) of organisations' actions on people and the natural environment.Impact
Example: A holding company involved in utilities and real estate acquires an energy company and expands its activities for east Asia to south-east Asia. As a result, the company will have additional associated impact topics, as well as additional contextual elements, to take into consideration.
The scope of measurement, assessment and valuation
The scope of measurement, assessment and valuation is informed by the results of the identification process, namely the identification of the organisation’s relevant impact topics based on its business profile and context. See Identify for more information. Measurement, assessment and valuation is a key step to inform further prioritisation of impact topics and to determine specific indicators for target-setting, action planning and implementation.
For sustainability-focused organisations, the focus of measurement, assessment and valuation efforts will be on the topics that are directly embedded in their purpose. Such organisations may also focus on additional topics if significant impact associations were revealed in the identification process.
It is important for organisations to measure and assess both practice and performance:
- Performance: Measuring performance is necessary to understand what the outcomes and impacts of activities are on people and the natural environment.
- Practice: An organisation’s sustainability performance is dependent on its practice, which is the combination of its inputs, activities, and outputs. The organisation’s practice is effectively the conduit or driver of its impacts
Impact drivers
The inputs, activities and outputs of organisations that intentionally or unintentionally cause or contribute to impacts
, and therefore equally merits measurement and assessment.
Measurement
Whether in relation to practice or to performance, measurement involves selecting appropriate indicators and metrics, and collecting data against them. This involves quantitative indicators and metrics, and possibly also qualitative information, which can be quantified using scores.
Example: An enterprise can provide quantitative data on the gender balance of a its board, or its water withdrawals. But the enterprise may provide qualitative information on its public human rights commitments or its approach to stakeholder engagement.
Measuring practice is necessary for understanding to what extent and how the organisation has embedded impact management into its business activities. This requires measurement against input
The resources and relationships that organisations draw upon for their business activities, as well as the contextual elements that define their business activities. The direct result of organisations’ activities, including their products, services and any by-products.Input
Output
Practice measurement should include data and information in relation to aspects of the organisation’s operations that may contribute to the organisation’s outcomes
Usage #1 A change or event resulting from organisations’ activities and outputs, providing a causal link between the activities/outputs and their impact(s) on people and/or the natural environment Usage #2 The level of well-being experienced by people or condition of the natural environment that results from the actions of the organisation, as well as from external factorsOutcome
- Production and operations
- Procurement and supply chain management
- The provision of products and services
- Human resource management
- Corporate policies and programmes
- Due diligence and risk management
- Corporate systems / data management
- Finance and investment
- Research and development
- Corporate citizenship, advocacy and partnerships
Example: A fashion company might collect information on the proportion of its suppliers reviewed by its human rights due diligence procedure and identify potential gaps in coverage.
It is important to note that the relevance of the different functions listed above will vary from sector to sector. More information about the main types of economic sectors can be found here.
Example: For a mining company, the extractive process will be central in the assessment of practice, whereas for a secondary industry such as chemicals or apparel, both the sourcing and production process will be important, while for a tertiary sector such as finance or consulting, the client portfolio and service offering will be most relevant to review.
Measuring performance is necessary in order to understand an organisation’s outcomes
Usage #1 A change or event resulting from organisations’ activities and outputs, providing a causal link between the activities/outputs and their impact(s) on people and/or the natural environment Usage #2 The level of well-being experienced by people or condition of the natural environment that results from the actions of the organisation, as well as from external factors The effect(s) of organisations' actions on people and the natural environment.Outcome
Impact
Example: Organisations can measure incidents of reported discrimination and levels of perceived discrimination in the workforce (outcomes or impacts), rather than exclusively measuring an organisation’s efforts to mitigate discrimination (activities).
While certain indicators and metrics can universally apply to all organisations, for meaningful impact management, sector and/or topic-specific metrics and indicators are indispensable.
Example: Coal mining companies may measure the incidence of worker’s pneumoconiosis, an industry-specific occupational health risk.
The ability to measure outcomes
Usage #1 A change or event resulting from organisations’ activities and outputs, providing a causal link between the activities/outputs and their impact(s) on people and/or the natural environment Usage #2 The level of well-being experienced by people or condition of the natural environment that results from the actions of the organisation, as well as from external factors The effect(s) of organisations' actions on people and the natural environment.Outcome
Impact
Distance to impact is typically larger for upstream impacts (e.g. impacts that occur in supply chains), as well as downstream impacts (e.g. consumer-related impacts). In such cases, it may not be easy to measure outcomes and impacts, and so proxies (such as practice indicators) may be needed to enable the organisation to understand its performance.
For investors and financial institutions, measuring and assessing outcomes and impacts is challenging. This is because most of their significant impacts on people and the natural environment occur downstream in the value chain, via the clients and consumers in their portfolios, rather than as a result of their own operations.
Example: In the case of a bank with a strong oil and gas component in its portfolio, climate change is a significant impact area. Because the emissions are linked to its portfolio (rather than to its own operations), it will not be in position to directly measure emissions. Bearing in mind the gaps in publicly available data (as well as practical difficulties in aggregating such data), the organisation will instead need to rely on a proxy and a specific methodology to calculate its financed emissions. Such a proxy could be based on a practice indicator, such as portfolio composition.
When indicators and metrics of practice are used, the strength of the association between inputs, activities and outputs, as well as outcomes and impacts, is central to ensuring that an organisation can draw conclusions about its impacts.
Example: There is a substantial evidence base outlining the environmental damage caused by specific volumes of non-recyclable materials being sent to landfill. The strength of the association between waste and environmental quality is therefore strong. This suggests that metrics on material waste can be an adequate proxy for certain forms of environmental impacts.
If there is no or weak evidence of causation between the chosen practice indicator and the outcomes and impacts, the information gathered will be inadequate for proper assessment and decision-making.
Example: A company that provides employee training cannot solely rely on practice indicators such as measuring the number of its training programmes, nor the number of employees it engages via such programmes, to understand its employees’ skills attainment and associated career opportunities. As such, the information gathered against these indicators are weak proxies for understanding skills attainment and associated opportunities, and so shouldn’t be used in isolation. To resolve this, the company should additionally measure the outcomes and impacts of its training programmes to understand the effects on its employees.
In other words, the evidence of causation between an organisation’s practice and the well-being of people or the condition of the natural environment needs to be strong, especially if it is exclusively using practice metrics or indicators.
It is important to note that an organisation’s outcomes and impacts are inherently dependent on the quality of its implemented activities. As such, where possible, practice measurement must always be accompanied by performance measurement.
Also notable is the fact that the scientific evidence base that can inform practice and performance indicators may not yet be available.
Assessment
Assessing practice and performance means placing data and information into context. This involves understanding how effectively impact management has been embedded in an organisation’s activities, whether an organisation’s actions and impacts are sustainable, and whether they are delivering the desired impact objectives.
Additional assessments (such as how the organisation’s practice and performance are evolving over time, whether its activities are effective in reducing negative and generating positive impacts, or whether its impacts are indeed the result of its own activities) are considered after implementation, as part of its monitoring processes. See the Monitor, learn and adapt action for more information.
| Measure, assess and value | Measure, assess and value | Monitor, learn and adapt | Monitor, learn and adapt | |
|---|---|---|---|---|
| Measurement | Assessment | Tracking | Evaluation | |
| Practice | ||||
| Current level of integration across activities and processes | x | |||
| Effectiveness of current practice to manage impacts | x | |||
| Changes in level of integration relative to a previous time | x | |||
| Performance | ||||
| Current level of performance | x | |||
| …relative to thresholds and reference values | x | |||
| Changes in level of performance relative to a previous time | x | |||
| …relative to counterfactual | x | |||
| Practice and performance | ||||
| Effectiveness of changes in practice to better achieve better performance (outcomes and impacts) | x |
Assessing practice involves reviewing to what extent an organisation’s current practices are fit for purpose to deliver desired outcomes and impacts. An organisation’s practice assessment is conducted using both the measured quantitative data, and any additional or complementary qualitative data (as outlined above under the measurement section). It should be carried out based on available knowledge and evidence on the relationship between inputs, activities and outputs, and outcomes and impacts.
Example: A bank aiming to reduce its climate change impacts should review all the ways in which its practices contribute to the emission of greenhouse gases, and identify the most significant levers to reduce emissions and improve its performance. The best available evidence may reveal that, while reducing employee travel may marginally lower emissions, the bulk of a bank’s climate change impacts are linked to its financing activities. This would therefore highlight the area of practice that the bank should act on. It could, for instance, adjust its portfolio composition, and offer transition finance products and services to clients in high-emitting sectors.
The relative effectiveness of various aspects of practice cannot always be established ex-ante. Either way, this also needs to be evaluated after implementation. See Monitor, learn and adapt to learn more about this process.
Assessing performance means placing an organisation’s performance into context. In particular, this involves understanding whether an organisation’s performance, relative to one or several impact topics, is sustainable in the context of environmental thresholds and social reference values; or, in short, whether the organisation is operating sustainably.
Thresholds
A level or range of performance that divides sustainable from unsustainable performance. These ranges are set with reference to social norms or planetary limits that have been identified through scientific research. Learn more about Thresholds and allocations. Source: United Nations Environment Programme Finance Initiative (UNEP FI); United Nations Conference on Trade and Development (UNCTAD) (The Cocoyoc Declaration, 1974); Kate RaworthSocietal or ecological threshold
In order to assess whether their performance is aligned with thresholds and reference values, organisations can use allocation methodologies. Allocation is the process of apportioning the organisation-specific responsibility to maintain thresholds in fair, just and proportionate ways. Allocation methodologies are also relevant to target-setting. See Set targets and plan for more information
Once the assessment process is completed, organisations can make further prioritisation decisions regarding the subject and focus of their impact management strategy. Organisations should prioritise impact topics for which:
- the (prior) identification process See Identify for more information reveals which topics are most strongly associated with the organisation (significant impact topics); and
- the assessment process reveals the largest gaps relative to thresholds and reference values.
Example: An agricultural company may have identified water scarcity and working conditions as two impact topics strongly associated with its business during the identification process. An assessment of its practice and performance may have revealed that it is doing well in terms of employee working conditions and rights, but that the water intensity of its production process is high, relative to water availability and locally applicable thresholds. As a result, it might place the higher priority on managing its practice and performance in this area. Its positive performance on employee working conditions must of course be maintained.
For sustainability focused organisations, the assessment process enables a refinement of the theory of change
A method that explains how a given intervention, or set of interventions, is expected to lead to specific development change, drawing on a causal analysis based on available evidence. Source: United Nations Development GroupTheory of change
Example: A social enterprise is focused on supporting people with disabilities by providing dedicated mobility services. It finds that, despite its services, significant segments of its target population continue to face mobility challenges. Having assessed its own performance, the social enterprise finds that a barrier to the extensive uptake of its services is due to its exclusive focus on the availability of special vehicles, rather than the additional man-power required to provide access and support to those using them. The enterprise’s model could therefore be improved by evolving towards a more complete end-to-end service.
Valuation
Impact valuation is the process of estimating the relative value that an organisation creates, preserves or erodes for itself and/or its stakeholders. This can support and reinforce the assessment process, in particular the prioritisation of significant impact topics. See Set targets and plan for more relevant information The objective of valuation is to support and improve decision-making by enabling comparability between impact topics.
The value of an organisation’s impacts can be understood from two different perspectives:
- the value of an organisation’s impacts to the people that experience them; and
- how impacts to people and the natural environment create or erode value to the organisation.
While valuation can be done using qualitative information, there is increasing interest in developing quantitative valuation approaches to express impacts in terms of a common unit. This allows organisations to quantify the relative magnitude or importance of various impacts or impact topics. Some methodologies use monetary figures as a common unit, with the objective of embedding these figures into organisations’ financial accounts.
Some impact valuation methodologies aggregate valuation data across impact topics in order to estimate the total value of their impacts or of a specific project or investment. This is also referred to as ‘net impact’.
Example: Figure 6 below illustrates a sample valuation of different impacts on an organisation’s employees. Some are positive (light grey), others negative (dark grey). Together, these valuations result in a net monetary value for the employment impact of the organisation. A set of calculations based on available impact data sit behind the valuation of each topic. For example, the health and wage quality value estimate in Figure 6 is driven by comparisons of wages to the available living wage calculations of where those employees are based.
Valuation through the use of a common unit requires a number of methodological choices and assumptions that come with certain risks, as they often imply a simplified representation of an organisations’ operations and impacts. This may be further compounded by the fact that data and valuation methodologies are only available for a limited number of impact topics. To help mitigate these risks, valuations should be used carefully and any choices, assumptions and limitations must be stated.
In addition, when aggregating data across different impact topics, the estimated value of impacts should still be stated individually for each impact topic. This is because the condition of each population group or component of the natural environment needs to be maintained above a specific threshold, and the good condition in one area does not compensate the bad condition of another.
Resources
Resources that set expectations on measurement, assessment and valuation
Measurement and assessment (for all enterprises):
OECD Guidelines for Multinational Enterprises
One of the main (and government-backed) international instruments on Responsible Business Conduct (RBC) setting out principles and standards on RBC. Regulators reference them in regulation.
This resource calls upon organisations to:
- Strategy: Align strategy with the expectation to avoid and address negative impacts of their operations, while contributing to sustainable development in the countries where they operate.
- Governance: under construction
- Identify: Set objectives with reference to minimum safeguards on topics such as: human rights, labour relations, employment practices, public health and safety, bribery and extortion, science and technology and taxation.
- Measure, assess and value: under construction
- Implement: Embed due diligence across business operations and in the value chain in order to identify, assess, mitigate, cease and prevent adverse impacts on people
- Communicate: under construction
OECD Due Diligence Guidance for Responsible Business Conduct
Guidance that provides practical support to enterprises on the implementation of the OECD Guidelines for Multinational Enterprises by providing plain language explanations of its due diligence recommendations and associated provisions.
Use this guidance to:
- Implement: Cease, prevent or mitigate negative impacts and provide for or cooperate in remediation where appropriate
Natural Capital Protocol
Guidance that outlines a process organisations should follow to identify, measure and value their impacts and dependencies on the natural environment.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Identify stakeholders in order to set objectives for a natural capital assessment and to map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value).
- Measure, assess and value: Value impacts and dependencies on natural capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a natural capital assessment.
- Implement: under construction
Social and Human Capital Protocol
Guidance that outlines a process for organisations to follow so they can identify, measure and value their impacts and dependencies on social and human capital.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value)
- Measure, assess and value: Value impacts and dependencies on social and human capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a social and human capital based assessment.
- Implement: under construction
SDG Impact Standards for Enterprises
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making. These practice standards also outline the ‘ABC’ classification methodology, which helps organisations assess whether an impact ‘Acts to reduce harm’, ‘Benefits stakeholders’, or ‘Contributes to solutions’ in relation to the SDGs.
Use this resource to:
Set up processes and embed practices that orient an organisation towards achieving the SDGs. The SDG Impact Standard contains practice indicators that are relevant to several actions. Use the links below to access guidance for different practice indicators. Alternatively, view the whole guidance document here.
Principles of Social Value
The Principles provide the basic building blocks for organisations that want to make decisions whilst taking social value into account. They are intended to help organisations optimise value for all stakeholders materially affected by an organisations activities. Practice Standards are available to help organisations implement each principle to a point where they are accountable for their activities and are making decisions to optimise value.
Use this resource to:
- Set up processes to include social value data in management decision-making.
Maximise Your Impact: A Guide for Social Entrepreneurs
Guidance to help an organisation maximise the positive social value it creates.
Use this resource to:
- Strategy: Engage stakeholders and understanding their objectives and needs in order to design a business model around delivering these objectives.
- Governance: under construction
- Identify: under construction
- Measure, assess and value: Check whether the organisation has all the information it needs to assess impact. The guidance contains 10 questions that guide impact assessment and function as a checklist to ensure all necessary contextual information is collected.
- Set targets and plan: Use the guidance on engaging stakeholders and understanding their objectives and needs in order to design a business model around delivering these objectives.
- Implement: Integrate information on social value into management decision-making.
B Corp certification
Certification awarded when an organisation achieves a score of 80 on the B Impact Assessment.
Use this resource to:
- Become B Corp Certified. Organisations undergo verification including interviews, submitting documentation, and as necessary site reviews, to increase confidence that the company’s score is accurate and the required 80-point score has been achieved.
Measurement and assessment (for investors and financial institutions):
Principles for Responsible Investment
A voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating sustainability topics into investment practice.
This resource calls upon organisations to:
- Strategy: Commit to considering environmental, social and governance risks and opportunities in investment, and to working with other industry participants to do the same. This initiative involves a fee for participation and requires periodic disclosure of progress made towards adopting the principles.
- Governance: under construction
- Measure, assess and value: under construction
Investing with SDG Outcomes: A Five-part Framework
A high-level framework for any investors looking to shape real-world outcomes in line with the Sustainable Development Goals (SDGs).
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Identify and understand the unintended outcomes of an investors’ investments and their own operations. This assessment involves identifying positive and negative real-world outcomes related to investees’ operations, products and services.
- Measure, assess and value: under construction
- Set targets and plan: Move from identifying and understanding unintended outcomes towards taking intentional steps to shape outcomes.
- Implement: Explore examples of how investors shape outcomes through investor actions including: investment decisions, stewardship of investees and engagement with policy makers and key stakeholders.
Responsible Business Conduct for Institutional Investors
Guidance that explains the application of the OECD Guidelines for Multinational Enterprises in the context of institutional investors. The report highlights key considerations for institutional investors in carrying out due diligence that will help to identify and respond to environmental and social risks.
Use this resource to:
- Strategy: under construction
- Governance: Embed responsible business conduct into policies and management systems.
- Identify: Understand the responsible business conduct expectations for institutional investors, including a discussion of key considerations when identifying negative impacts and risks.
- Measure, assess and value: Understand the key considerations for institutional investors in carrying out due diligence as recommended by the OECD Guidelines for Multinational Enterprises (OECD Guidelines). This helps institutional investors to prevent and address adverse impacts related to human and labour rights, the environment, and corruption caused by companies in their investment portfolios.
- Implement: Cease, prevent or mitigate negative impacts and provide for or cooperate in remediation where appropriate.
Due Diligence for Responsible Corporate Lending and Securities Underwriting
The overall objective of the Initiative is to advance human rights and positive outcomes for people through investor stewardship. The Initiative will primarily seek change through investors’ use of influence with a global framework for financial institutions to identify, respond to and publicly communicate on environmental and social risks associated with their clients.
Use this resource to:
- Implement: Cease, prevent or mitigate negative impacts and provide for or cooperate in remediation where appropriate
Operating Principles for Impact Management
Principles describe essential features of managing investments into companies or other organisations with the intent to contribute to measurable positive social or environmental impact alongside financial returns.
This resource has mandatory requirements for signatories.
This resource calls upon organisations to:
- Strategy: Define strategic impact objectives consistent with the investment strategy alongside managing strategic impact on a portfolio basis.
- Governance: Commit to following the principles and periodically having progress of adoption independently verified. The Principles can be applied to an entire investing organisation or an individual fund.
- Identify: under construction
- Measure, assess and value: Assess potential negative impacts of each investment.
- Set targets and plan: under construction
- Implement: Respond appropriately to information on actual and potential impacts.
- Communicate: Use Principle 9 to enable public disclosure of alignment with the Principles.
Core Characteristics of Impact Investing
The Core Characteristics of Impact Investing define the growing approach of impact investing, and offer the financial markets greater clarity on what constitutes credible impact investing.
This resource calls upon organisations to:
- Intentionally contribute to positive social and environmental impact, use evidence and impact data in investment design, manage impact performance, and contribute to the growth of impact investing
SDG Impact Standards for Private Equity Funds
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making.
This resource calls upon organisations to
- Measure, Assess and Value: Develop an impact management and measurement framework
- Set targets and plan: Set portfolio level impact goals.
- Implement: under construction
- Verification, assurance and certification: Disclose how the SDGs and sustainability are integrated into decision-making and report on performance
Principles for Responsible Banking
Principles for Responsible Banking (PRB) are designed to ensure that signatory banks’ strategy and practice align with the vision society has set out in the Sustainable Development Goals and the Paris Climate Agreement.
This resource calls upon organisations to:
- Strategy: Commit to aligning the bank’s activities and portfolios to global goals, namely the Sustainable Development Goals (SDGs) and the Paris Agreements, by embedding sustainability at the strategic, portfolio and transactional levels, across all business areas. This initiative involves a fee for participation and requires periodic disclosure of progress made towards enforcing the Principles.
- Governance: under construction
- Identify: under construction
- Measure, assess and value: under construction
- Set targets and plan: under construction
- Verification, assurance and certification: Use the PRB Assurance Guidelines to assure adherence to the Principles.
Impact Standards for Financing Sustainable Development (IS-FSD)
Practice standards to support donors in the deployment of public resources through DFIs and private asset managers, in a way that maximises the positive contribution towards the SDGs. The Standards are harmonised in approach with the UNDP SDG Impact Standards suite, the IS-FSD constitute a framework, ensuring that collectively (with the SDG Impact Standards for PE Funds, Bond Issuers and Enterprises) they help to connect actors across the system using a common language and approach for integrating SDG impacts in the investment strategy and throughout the investment process and governance structures.
This resource calls upon organisations to:
- Strategy: Set impact objectives framed in terms of the SDGs and country priorities
- Governance: Set up processes and embed practices that are aligned with the SDG Impact Standards.
- Measure, assess and value: Understand whether all relevant information is being actioned to understand impact. The Standards outline how baselines, social/ ecological thresholds and other contextual information should be included in assessment of whether an underlying asset is contributing to the SDGs.
- Set targets and plan: under construction
- Implement: under construction
- Communicate: Disclose how impacts are managed and measured
Valuation:
Natural Capital Protocol
Guidance that outlines a process organisations should follow to identify, measure and value their impacts and dependencies on the natural environment.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Identify stakeholders in order to set objectives for a natural capital assessment and to map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value).
- Measure, assess and value: Value impacts and dependencies on natural capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a natural capital assessment.
- Implement: under construction
Social and Human Capital Protocol
Guidance that outlines a process for organisations to follow so they can identify, measure and value their impacts and dependencies on social and human capital.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value)
- Measure, assess and value: Value impacts and dependencies on social and human capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a social and human capital based assessment.
- Implement: under construction
Social Value Management Certificate
Certification process that assesses to what extent the Principles of Social Value are embedded in an organisations systems and processes. The certificate has three levels that set out a progression for organisations looking to continuously improve how they optimise social value for their stakeholders.
Use this resource to:
- Certify that an organisation’s systems and processes adhere to the Principles of Social Value.
Principles of Social Value
The Principles provide the basic building blocks for organisations that want to make decisions whilst taking social value into account. They are intended to help organisations optimise value for all stakeholders materially affected by an organisations activities. Practice Standards are available to help organisations implement each principle to a point where they are accountable for their activities and are making decisions to optimise value.
Use this resource to:
- Set up processes to include social value data in management decision-making.
Report Assurance Standard
Report Assurance standard that provides criteria to assess the application of SVI’s Social Value Principles as evidenced in a report. Assurance is conducted acting in the interests of the affected stakeholders, an important distinction versus other assurance standards that are currently available.
Use this resource to:
- Assure a report that has been prepared in accordance with the Principles of Social Value. The Principles of Social Value and associated practice standards help organisations measure and manage the social value generated through their business activities. This means the assurance standard is best applied to a report that has been prepared in accordance with the principles from the outset. The assurance standard is used to assess application of the principles, it does not assure accuracy of performance information.
Indicators and measurement methodologies
Indicators:
Indicator Library
The Indicator Library builds on the Impact Radar and the Sector-Impact Map to provide a compilation of impact-related indicators and metrics.
Use this resource to:
- Measure, assess and value: To find relevant indicators and metrics for impact measurement and assessment
Harmonized Indicators for Private Sector Operations (HIPSO)
A set of harmonised metrics developed by subject matter experts and impact management practitioners, that have been agreed upon by Development Finance Institutions (DFIs) and other private sector partners.
In March 2021, HIPSO together with IRIS+ have published the Joint Impact Indicators, a harmonised set of basic indicators that are available for the impact investment community at large. Further harmonisation work continues: work is underway to map various investor metric sets and corporate disclosure standards, with a view to achieving global consistency. E.g. IRIS+-GRI, B Lab-GRI, HIPSO-IRIS+.
Use this resource to:
- Measure, assess and value: Select from a catalogue of metrics specifically designed for Development Finance Institutions.
GRI Topic-specific Standards
Reporting standards designed to help organisations understand and disclose their impacts in a way that meets the needs of multiple stakeholders. These standards are arranged by a set of Universal Standards that apply to all organisations, and 35 Topic Standards that contain disclosures for impacts related to economic, environmental and social topics.
Use this resource to:
- Measure, assess and value: The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Communicate: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts.
GRI Sector Standards
GRI is developing standards for 40 sectors to compliment their current topic standards.
Use this resource to:
- Identify: Identify sustainability topics to measure using the list of topics listed for each Sector Standard.
- Measure, assess and value: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report.
- Communicate: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts. The Sector Standards are a helpful starting point for identifying likely significant impacts.
CDP’s Disclosure System
Tool for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Disclosure System supports companies in making their environmental impact transparent to stakeholders, better understanding how they can reduce their impact, and act to become environmental leaders.
Use this resource to:
- Measure, assess and value: Track change in performance over time. Each question in the questionnaire is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Communicate: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
GISD Sector-Specific SDG-related Metrics for Corporate Reporting
This report recommends a set of sector-specific, SDG-related metrics by drawing on metrics from existing standard setters and benchmarks.
The Global Investors for Sustainable Development Alliance (GISD) is a group of 30 large investment firms convened by the United Nations Secretary General. The GISD sits within the United Nations Department of Economic and Social Affairs (UNDESA) and aims to scale-up long-term finance and investment in sustainable development.
Use this resource to:
- Measure, assess and value: Identify SDG-related metrics for eight sectors. Organisations can consider measuring the metrics specific to their sector.
- Communicate: Include recommended SDG-related metrics in disclosure to stakeholders.
Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals
Guidance on core indicators for entity reporting on the contribution towards the implementation of the Sustainable Development Goals.
Use this resource to:
- Understand and implement core indicators for entity reporting on the contribution towards the implementation of the Sustainable Development Goals. The guide provides detailed methodologies for calculating these indicators and potential sources of information for data gathering.
Measurement methodologies:
Measuring the non-financial performance of firms through the lens of the OECD Well-being Framework
This paper presents a conceptual framework for understanding the non-financial performance of firms through the lens of the OECD Well-being Framework.
Use this resource to:
- Better understand and navigate the selection of indicators in the ‘Social’ dimension of ESG. It can also help businesses align their metrics with those used in official statistics, thereby improving comparability across regions or sites in which a business operates.
COMPASS: The Methodology for Comparing and Assessing Impact
Guidance that provides an analytical framework to compare impact performance, with a specific focus on variance and the extent of the change required to enable meaningful contribution toward impact.
Use this resource to:
- Measure, assess and value: Normalise measures of impact so that impact performance can be compared.
- Set targets and plan: Understand how an investor might contribute in analytic terms, in addition to other aspects of investor contribution.
- Monitor, learn and adapt: Determine how meaningful the contribution of the investor is.
Five dimensions of impact
Guidance on the types of data needed to understand and assess impact performance. The IMP community of 2000+ practitioners identified five dimensions of impact that can be broken down into 15 more detailed data categories.
Use this resource to:
- Ensure the information gathered is sufficient for the decision it will inform (see also the ‘Investment classification’ resource).
WBA Benchmark Methodologies
Benchmarks that rank companies based on their impact. The WBA recognises that transformations are needed to achieve sustainability across seven systems. In each of these seven systems, companies that have a big role to play in hindering or advancing progress towards a sustainable future are identified as ‘keystone’ companies. WBA then develops a publicly available methodology for each system (or component of a system), drawing on existing standards to identify relevant topics and associated metrics for companies to disclose against.
Use this resource to:
- Find the methodology that corresponds best to the ‘system’ that the organisation operates within. Understand the list of topics and methodologies in the relevant ‘system’ when identifying sustainability topics to measure
Standard on Applying Social Value Principle 2: Understand What Changes (Part 2 – Designing Indicators (Metrics) to Measure the Outcomes)
Forthcoming: Standard and guidance on how to apply the second of SVI’s Social Value Principles.
Use this resource to:
- Measure, assess and value: Design custom metrics. This practice standard builds on Part 1, which outlines how to design custom metrics to measure a ‘well-defined’ outcome.
Assessment resources
For all enterprises:
How To Guide For Setting Science Based Targets
Guidance that provides a brief introduction to a leading methodology for translating planetary thresholds related to greenhouse gas emissions into company-specific targets. It also provides further links to more detailed implementation guidance.
Use this resource to:
- Measure, assess and value: Assess performance against a company-specific target for greenhouse gas emissions that references an ecological threshold.
- Set targets and plan: Set a company-specific target for greenhouse gas emissions that incorporates an ecological threshold for a given global warming scenario.
Science-Based Targets for Nature: Initial Guidance for Business
Guidance for setting science based targets related to nature. More generally, the SBTN is embarking on a multi-year strategy to develop guidance for translating planetary thresholds and societal goals into company-specific targets for air, water, land, biodiversity and ocean.
Use this resource to:
- Measure, assess and value: Assess performance in context of ecological thresholds.
- Set targets and plan: Set a company-specific target that references an ecological threshold for nature.
SDG Impact Standards for Enterprises
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making. These practice standards also outline the ‘ABC’ classification methodology, which helps organisations assess whether an impact ‘Acts to reduce harm’, ‘Benefits stakeholders’, or ‘Contributes to solutions’ in relation to the SDGs.
Use this resource to:
Set up processes and embed practices that orient an organisation towards achieving the SDGs. The SDG Impact Standard contains practice indicators that are relevant to several actions. Use the links below to access guidance for different practice indicators. Alternatively, view the whole guidance document here.
Maximise Your Impact: A Guide for Social Entrepreneurs
Guidance to help an organisation maximise the positive social value it creates.
Use this resource to:
- Strategy: Engage stakeholders and understanding their objectives and needs in order to design a business model around delivering these objectives.
- Governance: under construction
- Identify: under construction
- Measure, assess and value: Check whether the organisation has all the information it needs to assess impact. The guidance contains 10 questions that guide impact assessment and function as a checklist to ensure all necessary contextual information is collected.
- Set targets and plan: Use the guidance on engaging stakeholders and understanding their objectives and needs in order to design a business model around delivering these objectives.
- Implement: Integrate information on social value into management decision-making.
The Guide to Social Return on Investment (SROI)
Guidance on conducting identifying, measuring and valuing social impact to calculate Social Return On Investment (SROI).
Use this resource to:
- Monetise the social value an organisation creates, preserves, or erodes for stakeholders. This methodology guides an organisation through the process of valuing impact from the perspective of all affected stakeholders.
SASB Materiality Map
A visual and interactive tool to explore SASB’s disclosure topics across its industries and sectors.
User this resource to:
- Identify: Identify industry-specific disclosure topics and associated metrics. SASB’s research process identifies the subset of environmental, social, and governance issues reasonably likely to materially impact financial performance of the typical company in an industry
B Impact Assessment
Tool designed to help organisations measure and manage their impact on workers, community, environment, and customers.
Use this resource to:
- Measure, assess and value: Identify a set of metrics. The questionnaire enables organisations to quickly get started collecting information on performance on sustainability topics that are likely relevant to manage, based on the organisation’s size, sector, and geography.
SDG Action Manager
Tool designed to help organisations measure and manage their impacts in relation to the Sustainable Development Goals.
Use this resource to:
- Identify: Understand the SDGs most relevant to manage, based on the organisation’s size, sector, and geography. The questionnaire draws from B Lab’s B Impact Assessment and the UN Global Compact’s 10 Principles. It was developed through research and public consultation and so provides an evidence-based starting point for identifying sustainability topics to measure.
- Measure, assess and value: Obtain a set of metrics. The questionnaire enables organisations to collect performance information on the SDGs that are most relevant to manage, based on the organisation’s size, sector and geography.
Standard on Applying Social Value Principle 2: Understand What Changes (Part 1 – Creating Well Defined Outcomes)
Standard and guidance on how to apply the second of SVI’s Social Value Principles.
Use this resource to:
- Measure, assess and value: Engage with stakeholders to collaboratively agree on which outcomes to measure. This practice standard contains guidance on how an organisation can examine ‘chains of events’ and engage with stakeholders to decide the most appropriate point of measurement to support management decision-making (framed as ‘well-defined’ outcomes).
For investors and financial institutions:
Investing with SDG Outcomes: A Five-part Framework
A high-level framework for any investors looking to shape real-world outcomes in line with the Sustainable Development Goals (SDGs).
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Identify and understand the unintended outcomes of an investors’ investments and their own operations. This assessment involves identifying positive and negative real-world outcomes related to investees’ operations, products and services.
- Measure, assess and value: under construction
- Set targets and plan: Move from identifying and understanding unintended outcomes towards taking intentional steps to shape outcomes.
- Implement: Explore examples of how investors shape outcomes through investor actions including: investment decisions, stewardship of investees and engagement with policy makers and key stakeholders.
Impact Standards for Financing Sustainable Development (IS-FSD)
Practice standards to support donors in the deployment of public resources through DFIs and private asset managers, in a way that maximises the positive contribution towards the SDGs. The Standards are harmonised in approach with the UNDP SDG Impact Standards suite, the IS-FSD constitute a framework, ensuring that collectively (with the SDG Impact Standards for PE Funds, Bond Issuers and Enterprises) they help to connect actors across the system using a common language and approach for integrating SDG impacts in the investment strategy and throughout the investment process and governance structures.
This resource calls upon organisations to:
- Strategy: Set impact objectives framed in terms of the SDGs and country priorities
- Governance: Set up processes and embed practices that are aligned with the SDG Impact Standards.
- Measure, assess and value: Understand whether all relevant information is being actioned to understand impact. The Standards outline how baselines, social/ ecological thresholds and other contextual information should be included in assessment of whether an underlying asset is contributing to the SDGs.
- Set targets and plan: under construction
- Implement: under construction
- Communicate: Disclose how impacts are managed and measured
SDG Impact Standards for Private Equity Funds
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making.
This resource calls upon organisations to
- Measure, Assess and Value: Develop an impact management and measurement framework
- Set targets and plan: Set portfolio level impact goals.
- Implement: under construction
- Verification, assurance and certification: Disclose how the SDGs and sustainability are integrated into decision-making and report on performance
Investment Portfolio Impact Analysis Tool
Tool to help investors holistically understand and manage the actual and potential impacts of their portfolios.
Use this resource to:
- Identify: Identify impact areas and topics (economic, environmental and social) associated with an investment portfolio, based on an objective review (cartography) of the portfolio, sectoral and geographic breakdown.
- Measure, assess and value: Assess current practice and performance vis a vis its most significant impact areas by combining the tools ‘Identification’ outputs with additional data; use the assessment as a basis for target-setting and to define the bank’s action plan.
Impact Protocol for Banks
The Impact Protocol provides a step-by-step overview of how to analyse and manage bank portfolio impacts.
Use this resource to:
- Understand how to manage bank portfolio imapcts as per UNEP FI’s holistic impact approach and in conformity with the requirements of the Principles for Responsible Banking.The Protocol provides an overview of the impact management process as a whole; it is complemented by further UNEP FI resources such as the Impact Management Tool and the Thematic Target-Setting Guidance, which can be used to operationalise the methodology.
Portfolio Impact Analysis Tool for Banks
Tool to help banks and investors holistically understand and manage the actual and potential impacts of their portfolios.
Use this resource to:
- Identify: Understand the impact areas and topics associated to your bank’s portfolio based on portfolio composition and context, identify the bank’s most significant impact areas.
- Measure, assess and value: Assess current practice and performance vis a vis most significant impact areas by combining the tools ‘Identification’ outputs with additional data; use the assessment as a basis for target-setting and to define the bank’s action plan.
- Set targets and plan: Define relevant and meaningful targets and action plans.
Corporate Impact Analysis Tool
Tool to help banks and investors understand the actual and potential impacts of their clients and investee companies, as part of their impact management strategies and processes.
Use this resource to:
- Identify: Understand the impact areas and topics associated with a corporate client/investee based on company type, sector and context; identify the company’s most significant impact areas.
- Measure, assess and value: Review existing metrics for impact measurement via the associated Indicator Library embedded within the tool to. UNEP-FI has collated metrics from reporting standards and frameworks (GRI, SASB, CDP, TCFD), impact investor and development bank resources (IRIS+ and HIPSO), government taxonomies (EU Adaptation and Mitigation Taxonomies) and other sources to support indicator selection and interoperability between frameworks.
Valuation resources
Natural Capital Protocol
Guidance that outlines a process organisations should follow to identify, measure and value their impacts and dependencies on the natural environment.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Identify stakeholders in order to set objectives for a natural capital assessment and to map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value).
- Measure, assess and value: Value impacts and dependencies on natural capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a natural capital assessment.
- Implement: under construction
Social and Human Capital Protocol
Guidance that outlines a process for organisations to follow so they can identify, measure and value their impacts and dependencies on social and human capital.
Use this resource to:
- Strategy: under construction
- Governance: under construction
- Identify: Map the links between significant impacts and the business activities that affect or rely on them. This process helps organisations determine whether each impacted stakeholder is likely to affect their business model (and therefore enterprise value)
- Measure, assess and value: Value impacts and dependencies on social and human capital. This methodology draws on organisational data, data collected from stakeholders and publicly available country- or sector-level data.
- Set targets and plan: Use the guidance on how to identify and engage with stakeholders in order to set objectives for a social and human capital based assessment.
- Implement: under construction
The Guide to Social Return on Investment (SROI)
Guidance on conducting identifying, measuring and valuing social impact to calculate Social Return On Investment (SROI).
Use this resource to:
- Monetise the social value an organisation creates, preserves, or erodes for stakeholders. This methodology guides an organisation through the process of valuing impact from the perspective of all affected stakeholders.
Principles of Social Value
The Principles provide the basic building blocks for organisations that want to make decisions whilst taking social value into account. They are intended to help organisations optimise value for all stakeholders materially affected by an organisations activities. Practice Standards are available to help organisations implement each principle to a point where they are accountable for their activities and are making decisions to optimise value.
Use this resource to:
- Set up processes to include social value data in management decision-making.
Impact-Weighted Accounts Initiative Research
Research on impact valuation published in the form of case studies and white papers. Specific illustrative examples are provided for product impact.
Use this resource to:
- Learn about key considerations when monetising impact, using publicly available information on companies.
Standard on Applying Social Value Principle 3: Value the Things that Matter
Standard and guidance on how to apply the third of SVI’s Social Value Principles.
Use this resource to:
- Measure, assess and value: Use the guidance to value impacts from the perspective of affected stakeholders. This standard emphasises the importance of using data collected directly from stakeholders.
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