Strategy
Embed impact management into strategy according to organisational purpose and goals
Description
Embedding impact management into an organisations’s
A term used by the Platform to group enterprises, investors and financial institutions of all types. Source: Impact Management Platform The effect(s) of organisations' actions on people and the natural environment.Organisation
Impact
Two main models arise depending on the way sustainability and well-being related considerations are integrated in the organisation’s purpose (its motivation for existing or “raison d’être”) and vision (its goals and approach to conducting its business).
Enterprises, investors and financial institutions for which delivering positive impact is an integral part of their purpose and goals (referred to across the actions as sustainability-focused organisations). This model is most traditionally associated with social enterprises and impact investors, although some larger and more mainstream organisations have also started to embrace it. Impact management here is central to the organisation’s strategy. The organisation’s strategy will revolve around the specific positive impacts it wishes to contribute and a 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
Enterprises, investors and financial institutions for which delivering positive impact is not embedded in their purpose, but whose vision is to operate sustainably (referred to across the actions as sustainability-aligned organisations). In other words, these organisations seek to operate in alignment with minimum sustainability thresholds for people and the natural environment, based on the available science and as enshrined in international agreements. For these organisations, impact management remains an important component of the organisation’s strategy, and serves to ensure that, across its operations and activities, significant negative impacts are addressed and positive impacts are maximised.
These two models are not mutually exclusive nor inclusive. An organisation for which delivering positive impact is an integral part of their purpose and goals, may not necessarily set out to operate sustainably on the whole (i.e. in relation to the impact topics See the Identify action to learn more about impact topics that are not part of its core focus). On the other hand, an organisation seeking to operate sustainably may gradually find it possible and strategic to embed specific impact objectives directly within its purpose.
There are, of course, organisations for which delivering positive impact is not embedded in their purpose nor is operating sustainably a goal for them. For this third category of organisations, impact management is not directly embedded into their strategy. This does not mean that sustainability-related practices are necessarily absent. These organisations may manage their sustainability-related risks and ensure compliance with sustainability-related regulation, and address a subset of impacts in the process.
Resources
Guidance on integrating sustainability into company strategy
For all enterprises:
Ten Principles of the UN Global Compact
The Ten Principles of the UN Global Compact list how organisations should, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. They apply across all geographies in which the enterprise operates, and assert that good practices in one business area do not offset harm in another. They draw on several international declarations and other authoritative documents.
Use this resource for the following Actions of Impact Management:
- Strategy: Align strategy with the Ten Principles to prioritise societal needs such as the SDGs.
OECD Guidelines for Multinational Enterprises
The Guidelines for Multinational Enterprises are a set of voluntary principles and standards that promote responsible business conduct among multinational enterprises (MNEs). They cover various areas, including human rights, labour relations, environmental protection, anti-corruption and consumer protection, aiming to help MNEs align their business practices with societal expectations, and contribute to sustainable development.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
SDG Impact Standards for Enterprises
The SDG Impact Standards for Enterprises provide a practical guide and self-assessment tool for integrating the Sustainable Development Goals (SDGs) into organisational decision-making.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Natural Capital Protocol
The Natural Capital Protocol is a framework designed to help businesses identify, measure, and value their impacts and dependencies on natural capital. It provides a standardised approach for organisations to integrate natural capital considerations into their decision-making processes, enabling them to better understand and manage their relationship with nature.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Social and Human Capital Protocol
The Social and Human Capital Protocol is a framework designed to assist organisations in identifying, measuring, and managing their impacts and dependencies on social and human capital. It provides a standardised approach for businesses to integrate social and human capital considerations into their decision-making processes, enabling them to better understand and manage their relationships with employees, communities and stakeholders.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Principles of Social Value
The Principles of Social Value guide organisations in considering social value in decision-making, aiming to optimise value for all stakeholders materially affected by their activities. The practice standards help organisations to implement each principle to a point where they are accountable for their activities.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Maximise Your Impact: A Guide for Social Entrepreneurs
“Maximise Your Impact: A Guide for Social Entrepreneurs” proposes a practical approach for social entrepreneurs to understand and maximise the positive social value they create, supporting both the creation and development of impact-oriented organisations.
Use this resource for the following Actions of Impact Management:
- Strategy: Develop a strategy and business model that address the root causes of the problem that the organisation is trying to solve.
- Governance: Set the right governance structure and practices to serve the organisation’s mission.
- Identify: Identify the problems and solutions that the organisation will seek to address, including through qualitative research and stakeholder engagement.
- Measure, assess and value: Check whether the organisation has all the information it needs to assess its impacts. The guidance contains 10 questions that guide impact assessment, functioning as a checklist to ensure all necessary contextual information is collected.
- Set targets and plan: Create an impact goal (the core problem that the organisation is trying to achieve), set targets and forecast changes that the organisation is planning to make towards the impact goal and associated targets.
- Implement: Integrate information on social value into management decision-making.
- Monitor, learn and adapt: Understand how to use the collected information to decide whether to change, stop or scale-up activities, and learn how to develop a set of recommendations about adapting targets.
B Corp certification
The B Corp Certification is an assessment process that evaluates a company’s social and environmental performance, as well as governance and transparency. Organisations that achieve B Corp Certification demonstrate a commitment to meeting a high standard of responsible business practices and accountability.
Use this resource for the following Actions of Impact Management
- Verification, assurance and certification: Achieve B Corp certification by meeting the standards set by B Lab, demonstrating a commitment to social and environmental performance, accountability and transparency.
- Benchmarking and rating: Compare impact scores and metrics with those of other organiations within the same industry or sector.
For investors and financial institutions:
Principles for Responsible Investment
The Principles for Responsible Investment (PRI) are a voluntary and aspirational set of investment principles that offer a selection of possible actions for investors to incorporate sustainability topics into their investment practices.
Use this resource for the following Actions of Impact Management:
- Strategy: Commit to considering environmental, social and governance (ESG) risks and opportunities in investment decisions, and to working with other industry participants to do the same.
- Governance: Adopt active ownership, and integrate sustainability topics into policies and governance practices.
Investing with SDG Outcomes: A Five-part Framework
The “Investing with SDG Outcomes: A Five-part Framework” provides a high-level framework for investors to shape real-world outcomes in line with the Sustainable Development Goals (SDGs).
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Responsible Business Conduct for Institutional Investors
The Responsible Business Conduct for Institutional Investors helps institutional investors implement the due diligence provisions of the OECD Guidelines for Multinational Enterprises.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Operating Principles for Impact Management
The GIIN Operating Principles for Impact Management provide a framework for investors and fund managers to manage and measure their impact. The principles outline best practices for impact management across the investment lifecycle, from strategy development to implementation, monitoring and reporting.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
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 is for the following Actions of Impact Management:
- Strategy: Intentionally contribute to positive social and environmental impact by using evidence and impact data in investment design, enabling the investor to manage impact performance and contribute to the growth of impact investing overall.
IRIS+ Thematic Taxonomy
The IRIS+ Thematic Taxonomy provides guidance to impact investors on the IRIS+ Impact Categories and Impact Themes.
Use this resource for the following Actions of Impact Management:
- Strategy: Set an intention for impact using the IRIS+ Thematic Taxonomy of Impact Categories and Impact Themes.
SDG Impact Standards for Private Equity Funds
The SDG Impact Standards for Private Equity Funds provide a decision-making framework for integrating the Sustainable Development Goals (SDGs) into one or more funds.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Principles of Social Value
The Principles of Social Value guide organisations in considering social value in decision-making, aiming to optimise value for all stakeholders materially affected by their activities. The practice standards help organisations to implement each principle to a point where they are accountable for their activities.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Principles for Responsible Banking
The Principles for Responsible Banking (PRB) guide banks in aligning their business strategies with society’s goals, as well as promoting sustainability. These principles aim to encourage banks to play a crucial role in achieving global sustainable development objectives, including addressing climate change, promoting financial inclusion and fostering sustainable economic growth.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Impact Protocol for Banks
The Impact Protocol provides a step-by-step guide of how to analyse and manage a bank’s portfolio impacts, as per UNEP FI’s holistic impact approach and in alignment with the requirements of the Principles for Responsible Banking. The Protocol provides an overview of the impact management process as a whole and is complemented by other UNEP FI resources including the Impact Management Tool and the Thematic Target-Setting Guidance, which can be used to operationalise the Protocol.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Principles for Sustainable Insurance
The Principles for Sustainable Insurance function as a global framework that guide the insurance industry in addressing risks and opportunities related to environmental, social, and governance (ESG) factors.
Use this resource for the following Actions of Impact Management:
- Strategy: Commit to considering ESG risks and opportunities in insurance practices, and to working with other industry participants to do the same. These Principles are relevant to insurers in their dual role as both corporates entities conducting operations, and as organisations with investment activities.
- Governance: Embed ESG issues into decision-making processes and policies.
Impact Standards for Financing Sustainable Development (IS-FSD)
The Impact Standards for Financing Sustainable Development (IS-FSD) is a framework for donors, development finance institutions (DFIs) and their private partners to make financial decisions that maximise their positive contribution to the SDGs. The Standards are harmonised with the UNDP SDG Impact Standards.
This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.
Guidance on disclosure about integrating sustainability in company strategy
GRI Standards
The GRI Standards are a modular system of interconnected standards for reporting on sustainability performance, covering a wide range of sustainability topics, including climate change, human rights, labour practices and product responsibility. They enable organisations to measure, manage and communicate their sustainability performance effectively.
Use this resource for the following Actions of Impact Management:
- Communicate: Report to all stakeholders on material topics that reflect the organisation’s most significant impacts. GRI’s standardised metrics help the organisation and its stakeholders compare performance with others.
Company categorisation for investors
Sustainability Performance Classification (ABC of Enterprise Impact)
The ‘ABC’ of impact provides a way to connect these high-level intentions – which are what most enterprises and investors start with – to the more granular dimensions of impact and data categories, which help to measure and manage impact.
Use this resource to:
- Connect high-level intentions – which are what most enterprises and investors start with – to the more granular dimensions of impact and data categories, which help to measure and manage impact.
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