Impact measurement and valuation for banks

Aligning Banking Impact

Running a bank without an eye for impact – not knowing what value it creates, let alone how it can create value tomorrow – seems a risky proposition, doesn’t it?

Leading banks have started to understand that long-term value creation and their competitive position are inextricably linked through their role in society. They understand that they must manage their impact alongside their financial performance to create value for all stakeholders.

To truly understand the full impact a bank has, an objective form of measurement and valuation is needed, one that is quantitative and comparable across organisations. It should look beyond ‘simple’ outputs, but instead focus on the actual impact of banking activities, and it should recognize that much of a bank’s impact is outside its own operations.

Unlocking Value

To help organisations measure their value creation Impact Institute has developed the Integrated Profit & Loss methodology (IP&L) between 2014 and 2019. The IP&L has been successfully implemented by several large international organisations, enabling them to quantify and value the impact they have on its stakeholders through its effects on their welfare and capital stocks.

Impact Institute is proud to publish a new report ‘Impact Measurement and valuation for banks’. The report makes the case why banks and other financial institutions should measure their value creation, why they should use the IP&L to do so, and how the IP&L can lead to strategic insights.

By improving their impact, banks will become more future-proof and they will contribute to transforming our current economy and society to become more resilient and sustainable.

Priority areas

Banks

Footprint assessments, sector deep dives, (double) materiality assessments, sustainable finance product development, impact and sustainability reporting

Impact investors

Investment strategy and theory of change, impact due diligence, impact adjusted returns, portfolio impact insights, impact and sustainability reporting

Assets

ESG and impact-based asset allocation, fund and portfolio optimisation, (double) materiality assessments, impact and sustainability reporting

Insures

Footprint assessments, (double) materiality assessments, insurance product development, impact and sustainability reporting

Partnerships

We actively work with our clients and other partners to progress impact measurement across the financial sector. We are one of the co-founders of the Banking for Impact initiative, a coalition that came together to develop a harmonised quantitative approach to measuring impact, tailored to financial institutions.

The Netherlands Advisory Board on impact investing is an independent, non-profit organisation that aims to accelerate the growth and improve the effectiveness of the impact investing market.

The Erasmus Platform for Sustainable Value Creation is an academic think-tank at Rotterdam School of Management (RSM), Erasmus University Rotterdam, that collaborates with leading sustainability experts in the financial sector.

Publications

  • Towards the True Price, true value and true profit of food

    Report by True Price, commissioned by Wageningen University & Research. A roadmap to drive the social impact of food.

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  • Impact of Circular Craft

    This report, commissioned by Rijkswaterstaat delves into the impact of Circular Craft exemplified by two initiatives – La Poubelle and…

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  • Valuing the hidden costs in palm oil production

    Report by True Price, Trucost and RSPO, commissioned by UNEP Teeb Creating a methodology to improve strategy for a sustainable…

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  • A toolkit for transition

    This Report explores ways in which the Integrated Value Model enriches corporate decision-making and promotes sustainable business.

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