IMPACT MEASUREMENT AND VALUATION FOR BANKS

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 organizations. 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.

To help organizations 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 organizations, 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.