Key terms and concepts

Last updated: July 22, 2021

The extent to which information is free from error.

Source: Merriam-Webster Dictionary

Last updated: June 22, 2023

Everything that organisations do, including operations, the procurement of inputs, the sale and provision of products and/or services, as well as any supporting activities

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Last updated: July 21, 2021

Apportioning to organisations or other human populations fair, just and proportionate shares of the responsibility to produce and/or maintain a resource at no worse than the level set by social or ecological thresholds. Learn more about Thresholds and allocations.

Source: Adapted from Global Thresholds and Allocations Council

Last updated: July 22, 2021

Used on this site to refer to a security such as debt or equity issued by an organisation, or a physical asset such as land or a building.

Source: Adapted from Investopedia (definitions of ‘financial asset’ and ‘real asset’)

Last updated: July 22, 2021

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

This content is from the new “summary of glossary term” field.

Last updated: October 25, 2021

Standardising how to evaluate information against a defined set of criteria​.

Source: Impact Management Platform

Last updated: July 21, 2021

A starting point used for comparisons.

Source: Oxford English Dictionary

Last updated: October 25, 2021

Database of information that can be used as a baseline for performance.

Source: Impact Management Platform

Last updated: July 22, 2021

The evaluation (of something) by comparison with a point of reference. Putting performance into a common unit (using ratings or valuation) is necessary to enable comparison of performance at different units of analysis.

Source: Oxford English Dictionary

Last updated: July 22, 2021

The resources and relationships that the organisation draws upon for its business activities.

Source: OECD Development Assistance Committee

Last updated: July 21, 2021

The resources and relationships affected and transformed by an organisation. The capitals are characterised in the Value Reporting Foundation’s Integrated Reporting Framework as financial, manufactured, intellectual, human, social and relationship, and natural. The OECD’s Well-being Framework groups financial, manufactured and intellectual capital into one category: economic capital. Capitals Coalition do not include intellectual capital, and use the term produced capital, instead of manufactured capital.

Source: Capitals Coalition; Value Reporting Foundation (VRF); OECD

Last updated: July 22, 2021

The action or process of providing someone or something with an official document attesting to a status or level of achievement.

Source: Oxford English Dictionary

Last updated: June 16, 2023

The various procedures set in place to reduce mistakes, prevent improper behaviour, or decrease the risk of centralisation of power.

Source: Investopedia

Last updated: July 22, 2021

Criteria are complete when the subject matter information prepared in accordance with them does not omit factors that could reasonably be expected to affect decisions of the intended users made on the basis of that subject matter information. Complete criteria include, where relevant, benchmarks for presentation and disclosure.

Source: International Standards for Assurance Engagements (ISAE) 3000

Last updated: July 22, 2021

Refers to the circumstances that form the setting for an event, statement, or idea, and in terms of which it can be fully understood. Here the term specifically refers to the other information that an organisation needs to collect to fully understand what type of impact has occurred, in order to make a judgement about the nature of the performance. This contextual information is sometimes referred to as the multi-dimensional nature of impact. See Assess Impacts.

Source: Oxford English Dictionary

Last updated: July 22, 2021

The situation or condition which hypothetically may prevail for individuals, organisations, or groups were there no intervention. Measuring the counterfactual answers the question: what would have happened to people or the natural environment if they/it had not interacted with the organisation?

Source: OECD Development Assistance Committee

Last updated: July 22, 2021

The benchmarks used to measure or evaluate the underlying subject matter.

Source: International Standards for Assurance Engagements (ISAE) 3000

Last updated: July 21, 2021

When an organisation’s impacts, or changes in the external environment in which it operates, affect an organisation’s cash flows, or future cash flows, and therefore create or erode investors’ determination of its enterprise value.

Source: Value Reporting Foundation (VRF)

Last updated: July 21, 2021

Market capitalisation (shareholder value) plus the market value of net debt. It is determined by capital market participants based on their estimation of the present value of expected cash flows spanning the short-, medium-, and long-term. Essential inputs in determining enterprise value include corporate reporting in financial statements, as well as reporting on sustainability matters that it is reasonably possible will positively or negatively affect the company’s cash flows over time (i.e. affecting revenue, costs, assets, liabilities, cost of capital and/or risk profile). The term is widely used and is technically specific in capturing the notion of expected value creation/preservation/erosion over time for a company’s equity and debt investors. This expected value creation/preservation/erosion is fundamentally interdependent with a company’s creation/preservation erosion of value for its other stakeholders.

Source: Value Reporting Foundation (VRF)

Last updated: July 22, 2021

The explicit and systematic inclusion of ESG issues in investment analysis and investment decisions. Put another way, ESG integration is the analysis of all material sustainability topics in investment analysis and investment decisions.

Source: Principles for Responsible Investment (PRI)

Last updated: July 22, 2021

Information used by the assurer in arriving at the assurer’s conclusion. Evidence includes both information contained in relevant information systems, if any, and other information.

Source: International Standards for Assurance Engagements (ISAE) 3000

Last updated: July 22, 2021

Financial performance aimed at or sought.

Source: Adapted from Oxford English Dictionary

Last updated: July 21, 2021

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)

Last updated: July 26, 2021

Information or instructions on how to do something.

Source: Cambridge English Dictionary

Last updated: June 19, 2023

A term used by the Platform to denote risks and opportunities that are specific to an individual organisation.

Source: Impact Management Platform

Last updated: July 21, 2021

The effect(s) of organisations’ actions on people and the natural environment.

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Last updated: July 22, 2021

A classification methodology, akin to financial asset classes, that groups investments with similar impact characteristics based on their impact performance data (or, in the case of new investments, their impact objectives). Impact classes bring together the impact performance (or objectives) of the assets being invested in and the strategies that the investor uses to contribute to that impact.

Source: Impact Management Project (IMP)

Last updated: June 22, 2023

The inputs, activities and outputs of organisations that intentionally or unintentionally cause or contribute to impacts

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Last updated: August 21, 2023

The process by which an organisation understands, acts on and communicates its impacts on people and the natural environment, in order to reduce negative impacts, increase positive impacts, and ultimately to achieve sustainability and increase well-being.

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Last updated: June 26, 2023

The sequence that links organisations’ actions with their effects on people and the natural environment.

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Last updated: July 22, 2021

The risk to stakeholders that the desired impact is not occurring, or that unexpected negative impacts are occurring. This risk is distinct from financial risk, since it is risk of consequences for affected stakeholders, rather than risk to the financial value of an organisation. There are 9 types of impact risk currently identified.

Source: Impact Management Project (IMP)

Last updated: July 22, 2021

The overall intention of the investor, and their contribution to achieving that intention.

Source: International Finance Corporation (IFC)

Last updated: July 22, 2021

The resources and relationships that organisations draw upon for their business activities, as well as the contextual elements that define their business activities.

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Last updated: July 22, 2021

A concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation, preservation or erosion of value in the short-, medium- and long-term. The primary purpose of an integrated report is to explain to providers of financial capital how an organisation creates value over time.

Source: Value Reporting Foundation (VRF) Integrated Reporting Framework

Last updated: July 22, 2021

The active consideration by an organisation of the relationships between its various operating and functional units and the capitals (or resources) that the organisation uses or affects. Integrated thinking leads to integrated decision-making and actions that consider the creation, preservation or erosion of value over the short-, medium- and long-term. In considering value, the organisation recognizes that the value created for itself (and, by extension, its providers of financial capital) is linked to the value created for other stakeholders and society at large.

Source: Value Reporting Foundation (VRF) Integrated Reporting Framework

Last updated: July 22, 2021

A person, organisation, or country that puts money into an business or other organisation.

Source: Cambridge English Dictionary

Last updated: July 22, 2021

Investment decisions; stewardship of investees; engagement with policy makers and key stakeholders.

Source: Principles for Responsible Investment (PRI)

Last updated: July 22, 2021

The contribution that the investor makes to enable enterprises (or intermediary investment managers) to achieve impact.

Source: Impact Management Project (IMP)

Last updated: July 23, 2021

• Reasonable assurance: risk of misstatement of the assurance opinion is reduced to a low level through extensive procedures. The assurance provider obtains sufficient evidence to confirm whether the subject matter conforms to the criteria.
• Limited assurance: risk of misstatement is reduced through the collection of evidence but not to the low level required by reasonable assurance. Assurance providers provide comfort over whether the underlying subject matter plausibly meets the criteria.

Source: Based on International Standards for Assurance Engagements (ISAE) 3000

Last updated: July 21, 2021

The processes used by the organisation to identify, assess and manage sustainability performance.

Source: Task Force on Climate-related Financial Disclosures (TCFD)

Last updated: July 22, 2021

Information is considered material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users make on the basis of the reported information.

Source: Adapted from International Accounting Standards Board (IASB)

Last updated: July 21, 2021

A standard of measurement. The words ‘metric’ and ‘indicator’ are typically used interchangeably. Metrics are used to measure the state of something at a point in time. Repeated measurement makes it possible to determine change over time.

Source: Adapted from Meriam Webster Online Dictionary

Last updated: July 22, 2021

The estimation of the relative importance, worth or usefulness of impacts to the people who experience the impact, expressed as a monetary value. Impacts can be experienced by people directly, or through changes to the planet or the economy.

Source: Consensus definition based on discussions with Capitals Coalition; Impact Weighted Accounts Initiative (IWAI); Social Value International (SVI); and Value Balancing Alliance

Last updated: June 26, 2023

Whoever or whatever is affected by an organisation’s actions, specifically people and the natural environment.

Learn more here.

Last updated: July 21, 2021

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

Last updated: June 19, 2023

A term used by the Platform to group enterprises, investors and financial institutions of all types.

Source: Impact Management Platform

Last updated: July 22, 2021

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

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Last updated: July 22, 2021

The direct result of organisations’ activities, including their products, services and any by-products.

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Last updated: July 21, 2021

A way of doing something that is the usual or expected way in a particular organisation or situation.

Source: Oxford English Dictionary

Last updated: October 25, 2021

Sets of procedures that represent best practices within a field. Practice standards generally operationalise principles by providing an approach for incorporating them in systems and processes (with an intention to bring a level of consistency and comparability across practitioners). 

Source: Impact Management Platform

Last updated: October 25, 2021

Guidelines followed by a professional group that may form a fundamental basis of the field.​

Source: Impact Management Platform

Last updated: July 22, 2021

A proxy is an indirect measure of the desired outcome which is itself strongly correlated to that outcome. It is commonly used when direct measures of the outcome are unobservable and/or unavailable.

Source: Johns Hopkins

Last updated: July 22, 2021

A classification or ranking of something based on a comparative assessment of their quality, standard, or performance.

Source: Oxford English Dictionary

Last updated: July 23, 2021

• Reasonable assurance: risk of misstatement of the assurance opinion is reduced to a low level through extensive procedures. The assurance provider obtains sufficient evidence to confirm whether the subject matter conforms to the criteria.
• Limited assurance: risk of misstatement is reduced through the collection of evidence but not to the low level required by reasonable assurance. Assurance providers provide comfort over whether the underlying subject matter plausibly meets the criteria.

Source: Adapted from International Standards for Assurance Engagements (ISAE) 3000

Last updated: October 25, 2021

Guiding principles and content elements for a report, and the fundamental concepts that underpin them​.

Source: Impact Management Platform

Last updated: September 2, 2021

Standardising reporting requirements. This includes universal reporting requirements for all entities as well as topic-specific or industry-specific reporting requirements.

Source: Impact Management Platform

Last updated: October 25, 2021

Guidelines recommending minimum actions to protect against harm.

Source: Impact Management Platform

Last updated: July 21, 2021

Measurable, actionable, and time-bound objectives, based on the best available science, that allow actors to align with Earth’s limits and societal sustainability goals.

Source: Science-Based Targets Network

Last updated: July 22, 2021

An impact is significant if the change in well-being (or the condition of the natural environment) caused by the organisation is big and/or occurs for many people, lasts for a long time and is important to those affected. See Assess Impact for information on collecting these data points..

Source: Social Value International (SVI)

Last updated: July 21, 2021

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 Raworth

Last updated: June 26, 2023

In the context of impact management, enterprises, investors and financial institutions (in short, “organisations”) can be thought of as the sources of impact.

Learn more here ›

Last updated: July 21, 2021

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

Last updated: July 26, 2021

Rules or guidelines for common and repeated use to which organisations demonstrate adherence with which compliance is not necessarily mandatory in law. Standards are created through a process of multi-stakeholder consultation.

Source: Adapted from ISEAL

Last updated: July 21, 2021

A plan for achieving something or reaching a goal.

Source: Cambridge English Dictionary

Last updated: June 22, 2023

Specific issues that are important to the object(s) of impact.

Learn more here.

Last updated: July 22, 2021

A company’s practice of reporting publicly on its most significant economic, environmental, and/or social impacts, and hence its contributions – positive or negative – towards the goal of sustainable development.

Source: Global Reporting Initiative (GRI)

Last updated: July 21, 2021

A term used broadly to denote aspects of stakeholder well-being (e.g. health, wealth, safety), or business activities or practices that are evidenced drivers of well-being (e.g. employment, diversity and inclusion). This term is synonymous with ‘sustainability matters’, ‘impact areas’, ‘impact categories’ or ‘general issue categories’ which are similar terms used by different standard setters.

Source: OECD Well-being Framework; Global Reporting Initiative (GRI) Sustainability Topics; Sustainability Accounting Standards Board (SASB) General Issue Categories; IRIS+ Categories; United Nations Environment Programme Finance Initiative (UNEP FI) Impact Areas

Last updated: July 22, 2021

Disclosures about an entity’s performance on sustainability matters that drive enterprise value, including information about an entity’s governance, strategy and risk management of those matters.

Source: Value Reporting Foundation (VRF)

Last updated: July 21, 2021

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

Last updated: June 16, 2023

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 Group

Last updated: July 26, 2021

Software- or Excel-based resources (in this context, tools help automate aspects of an action, or multiple actions of impact management).

Source: Impact Management Platform

Last updated: July 22, 2021

In aggregate, all significant impacts on the well-being of people and the condition of the natural environment, caused by the assets in the portfolio (valuation, classification or taxonomy approaches are required to assess the total impact of each asset), and the investor’s contribution towards that impact.

Source: Impact Management Project (IMP)

Last updated: July 22, 2021

In aggregate, all significant impacts on the wellbeing of people and the condition of the natural environment, caused by an organisation (valuation, classification or taxonomy approaches may be are required to aggregate impacts).

Source: Impact Management Project (IMP)

Last updated: July 28, 2021

In aggregate, all significant impacts on the well-being of people and the condition of the natural environment, caused by the assets in the portfolio (valuation, classification or taxonomy approaches are required to assess the total impact of each asset).

Source: Impact Management Project (IMP)

Last updated: July 22, 2021

The phenomenon that is measured or evaluated by applying criteria.

Source: International Standards for Assurance Engagements (ISAE) 3000

Last updated: July 22, 2021

An estimation of the worth of something.

Source: Oxford English Dictionary

In the context of Sustainability: a process that seeks to understand the relative value that an organisation creates, preserves or erodes for its stakeholders, which is understood by expressing sustainability performance information as a common unit of value. Estimating value to different types of stakeholders sometimes requires different methodologies. See Glossary terms Value to society and Value to the organisation.

Source: Value Accounting Network

Last updated: July 22, 2021

The relative importance, worth or usefulness of impacts to the people who experience them, expressed in a common unit of value. Impacts can be experienced by people directly, or through changes to the planet or the economy. Also known as impact valuation.

Source: Consensus definition based on discussions with Capitals Coalition; Impact Weighted Accounts Initiative (IWAI); Social Value International (SVI); and Value Balancing Alliance

Last updated: July 22, 2021

How an organisation’s stakeholders, along with changes in the external environment in which the organisation operates, affect the amount and timing of the entities cash flows, including in the long-term.

Source: Value Reporting Foundation (VRF)

Last updated: July 22, 2021

The act of showing or checking that something is true or accurate.

Source: Oxford English Dictionary

Last updated: July 22, 2021

The state of being or doing well in life; happy, healthy, or prosperous condition; moral or physical welfare. The OECD Well-being Framework states that the 11 dimensions of well-being are comprised of the outcomes that matter most to people.

Source: Oxford English Dictionary, Organisation for Economic Co-operation and Development (OECD)

Last updated: July 22, 2021

The specific aspect of well-being or condition of the natural environment that is most appropriate to measure. For example, a healthcare organisation might identify the outcome of ‘good health’ before identifying the specific health condition, which is the well-defined outcome. Organisations then select metrics to measure the outcome periodically, e.g. blood sugar level, self-reported mental health, body mass index. Social Value International promotes the practice of engaging with stakeholders to define the specific outcome that is of most value to them, to help with identifying the well-defined outcome.

Source: Social Value International (SVI)