For a world where everyone can live a fulfilling life with dignity, we need unprecedented and enduring change. Accords such as the Sustainable Development Goals, the Paris Agreement, and the European Convention on Human Rights give direction to the concrete objectives of this change. Underlying them all is the call for an impact economy: an economy in which work, entrepreneurship, innovation, and technology engender a better world.
In the impact economy, ‘classical’ economic wisdom to maximise profit for shareholders is replaced by a license to operate that is granted based on the value a business creates for its stakeholders. And this value is calculated by more than profits; it includes impact, as well: a business’s impact on, for example, job creation, climate change, and the quality of life of its clients. But how do you steer a company or an organisation on impact? And how do you communicate this impact to your shareholders, stakeholders, the market, and the economic landscape as a whole?
Impact statements provide an answer. It is thus with great pleasure that we present the beta version of the Framework for Impact Statements. This framework intends to help organisations construct their own impact statements, setting their context and outlining the five key elements they constitute: the Integrated Profit & Loss (IP&L) Statement and its four derivatives, the Investor Value Creation Statement, the Stakeholder Value Creation Statement, the External Cost Statement, and the Sustainable Development Goals (SDG) Contribution Statement. Together, these statements provide a quantified and robust overview of value creation for an organisation’s stakeholders in terms of the six capitals of the IIRC (Financial, Manufactured, Intellectual, Human, Social, and Natural). This framework thus also equips organisations with the principles that should be followed in the development of their impact statements.
The Framework for Impact Statements is our first contribution towards a widely accepted standard for making impact statements. It is a work-in-progress. While we intend this version to be used by companies and organisations that want to improve their impact measurement, reporting, and steering, we are also publishing this beta version to solicit feedback for its improvement and expansion. The principles around impact statements are neither simple nor value-free. Your expertise and perspective as members, partners, stakeholders, and market peers will be essential in the development of impact statements that truly build the impact economy.
In 2020, we will hold an expert consultation period to gather from scientists and other experts. After processing the expert review, we will hold a public consultation period to gather input from all stakeholders. Following that we will publish the revised Framework based on the feedback from the two consultation periods. If you would like to contribute to FIS by being an expert reviewer, please send an email to FIS@impactinstitute.com.
Adrian de Groot Ruiz
Executive Director of the Impact Institute