Governance, strategy, and management approach
Processes are put in place to enable execution of all actions
Overview
Organisations design their strategy
A plan for achieving something or reaching a goal. Source: Cambridge English Dictionary The system of rules, practices and processes by which a company is directed and controlled. Source: Institute of Chartered Accountants in England and Wales (ICAEW) The processes used by the organisation to identify, assess and manage sustainability performance. Source: Task Force on Climate-related Financial Disclosures (TCFD) Guidelines followed by a professional group that may form a fundamental basis of the field. Source: Impact Management Platform A way of doing something that is the usual or expected way in a particular organisation or situation. Source: Oxford English DictionaryStrategy
Governance
Management
Principles
Practice
Principles of practice establish the need for processes that integrate social and environmental objectives
Something that efforts or actions are intended to attain or accomplish. Objectives are SMART if they are: specific, measurable, achievable, realistic and time-bound. Source: Cambridge English Dictionary; Management ReviewObjective
- setting objectives (often in line with the SDGs);
- engaging with stakeholders
Stakeholder
An entity or individual that can reasonably be expected to be significantly affected by the organisation’s activities, products and services, or whose actions can reasonably be expected to affect the ability of the organisation to successfully implement its strategies and achieve its objectives.
Source: Global Reporting Initiative (GRI); OECD Due Diligence Guidance for Responsible Business Conduct; OECD Well-being Framework; Value Reporting Foundation (VRF) Integrated Reporting Framework
; - collecting and using impact performance information for decision-making;
- disclosing the rigour of these processes and the resulting sustainability performance information.
Some principles also advocate for verification
The act of showing or checking that something is true or accurate. Source: Oxford English Dictionary The methods and processes employed to evaluate an organisation’s disclosures about its performance, as well as its underlying systems, data and processes, against suitable criteria and standards in order to increase confidence in the information for use in decision-making. The results are shared in a written conclusion called an assurance statement. Source: Adapted from AccountAbilityVerification
Assurance
Some principles are specific about the type of impact
A change in an aspect of people’s well-being or the condition of the natural environment caused by an organisation. Source: Impact Management Platform; Well-being defined as in OECD Well-being Framework Meeting the needs of the present without compromising the ability of future generations to meet their needs or overshooting Earth’s ecological limits (Brundtland Commission). In context of impact measurement, outcomes for people are sustainable if they are within the acceptable range determined by societal thresholds, and outcomes for the natural environment are sustainable if they are within the acceptable range determined by ecological thresholds (Science-Based Targets Initiative and Kate Raworth). Sustainability is the quality of being able to continue over a period of time (Cambridge English Dictionary). Source: Brundtland Commission; Science-Based Targets Initiative; Kate Raworth; Cambridge English DictionaryImpact
Sustainable
Most initiatives that develop principles also develop guidance, tools and methodologies to support implementation and compliance. Some provide an associated assurance standard, so that organisations can have their adherence to principles assured by a third-party. The UNDP Practice Standards are aligned with the core principles, whilst providing indicators so that organisations can self-assess the quality of their practices.
Resources
Principles of practice
Principles are tailored to different sectors or types of organisation and the exact scope varies from one set of principles to another.
CFO Principles on Integrated SDG Investments and Finance
Principles to guide companies in aligning their sustainability commitments with credible corporate finance strategies geared towards contributing to the Sustainable Development Goals.
For organisations
Use this resource to:
- Governance, Strategy and Management Approach: Integrate impact management and contribution to the SDGs into the corporate finance function. This initiative involves a fee for participation.
For investors and financial institutions
Use this resource to:
- Strategy: Integrate impact management and contribution to the SDGs into the corporate finance function. This initiative involves a fee for participation
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 resource to:
- Governance, strategy, and management approach: Assist enterprises with developing and strengthening their due diligence system, as well as processes related to impacts in operations, supply chains, and business relationships.
Principles for Positive Impact Finance
Principles for financial institutions and their public and private stakeholders to transition to an impact-based economy that can deliver on people’s needs and aspirations within planetary boundaries.
For organisations
Use this resource to:
- Governance, strategy and management approach: Use as a reference for key definitions and requirements for the delivery and assessment of positive impact finance.
For investors and financial institutions
Use this resource to:
- Strategy: Reference key definitions and recommended practices when embedding impact management into investment strategy, governance and management approach.
Principles of Social Value
Principles that 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. SVI is developing practice standards 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:
- Governance, Strategy and Management Approach: Set up processes to include social value data in management decision-making.
Standards of practice
Standards of practice provide a checklist to help companies put systems and processes in place that support effective internal management decision-making as well as external reporting. In this way, these standards are a relevant reference point for all actions.
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.
- Governance, strategy, and management approach:
- Set and revise objectives:
- 1.1.1 / 1.1.2 / 1.1.3 / 1.1.4 / 1.1.5 / 1.1.6 / 1.1.7 / 1.1.8 / 1.1.9 / 1.1.10 / 1.1.11
- 1.2.1 / 1.2.2 / 1.2.3 / 1.2.4 / 1.2.5 / 1.2.6 / 1.2.7
- Identify sustainability topics:
- Measure sustainability performance:
- Assess impact:
- Estimate value created:
- Verify:
- Integrate and act:
- Disclose:
Definitions
Assurance
The methods and processes employed to evaluate an organisation’s disclosures about its performance, as well as its underlying systems, data and processes, against suitable criteria and standards in order to increase confidence in the information for use in decision-making. The results are shared in a written conclusion called an assurance statement.
Source: Adapted from AccountAbility
Governance
The system of rules, practices and processes by which a company is directed and controlled.
Source: Institute of Chartered Accountants in England and Wales (ICAEW)
Impact
A change in an aspect of people’s well-being or the condition of the natural environment caused by an organisation.
Source: Impact Management Platform; Well-being defined as in OECD Well-being Framework
Management
The processes used by the organisation to identify, assess and manage sustainability performance.
Source: Task Force on Climate-related Financial Disclosures (TCFD)
Objective
Something that efforts or actions are intended to attain or accomplish. Objectives are SMART if they are: specific, measurable, achievable, realistic and time-bound.
Source: Cambridge English Dictionary; Management Review
Practice
A way of doing something that is the usual or expected way in a particular organisation or situation.
Source: Oxford English Dictionary
Principles
Guidelines followed by a professional group that may form a fundamental basis of the field.
Source: Impact Management Platform
Stakeholder
An entity or individual that can reasonably be expected to be significantly affected by the organisation’s activities, products and services, or whose actions can reasonably be expected to affect the ability of the organisation to successfully implement its strategies and achieve its objectives.
Source: Global Reporting Initiative (GRI); OECD Due Diligence Guidance for Responsible Business Conduct; OECD Well-being Framework; Value Reporting Foundation (VRF) Integrated Reporting Framework
Strategy
A plan for achieving something or reaching a goal.
Source: Cambridge English Dictionary
Sustainable
Meeting the needs of the present without compromising the ability of future generations to meet their needs or overshooting Earth’s ecological limits (Brundtland Commission). In context of impact measurement, outcomes for people are sustainable if they are within the acceptable range determined by societal thresholds, and outcomes for the natural environment are sustainable if they are within the acceptable range determined by ecological thresholds (Science-Based Targets Initiative and Kate Raworth). Sustainability is the quality of being able to continue over a period of time (Cambridge English Dictionary).
Source: Brundtland Commission; Science-Based Targets Initiative; Kate Raworth; Cambridge English Dictionary
Verification
The act of showing or checking that something is true or accurate.
Source: Oxford English Dictionary
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