On our mission to realise an Impact Economy we work with our clients to help them transform towards impact-driven organisations. In this way can improve the impact of our clients and the sectors they operate in. We take a transformational approach and focus on sectors with high externalities.
Below you will find four projects we have recently completed related to key societal transitions:
- Circular Rubber Technologies (CRT): Supporting CRT to promote the resource transition
- econic: towards a regenerative business model with impact measurement, reporting and steering (energy transition)
- ABN AMRO SIF: impact due diligences to assess impact alignment, opportunities, and risks of potential investments (sustainable finance transition as key enabler)
- ABN AMRO: a model-based approach to assessing the bank’s negative impact of biodiversity (sustainable finance transition as key enabler)
SUPPORTING CIRCULAR RUBBER TECHNOLOGIES (CRT) TO PROMOTE RESOURCE TRANSITION
July 28, 2022, was Earth Overshoot Day: on this day we used up all the natural resources the Earth can give us this year. Earth Overshoot Day acts as a reminder to accelerate the resource transition. We must transition towards a more circular economy in which planetary boundaries and human rights are respected. This requires insight into the social and environmental costs of virgin and recycled products. Circular Rubber Technologies (CRT) is a rubber reclaim production company operating out of Canada. It hopes to create a more circular and sustainable form of rubber reclaim production through the reuse of abandoned rubber from mining equipment.
Impact Institute worked together with CRT to assess the external costs or True Price gap of the rubber reclaim CRT produces. Moreover, we assessed the True Price gap of two virgin (i.e., non-recycled) rubbers made from natural feedstock (latex farmed in Thailand) and synthetic feedstock (crude oil extracted in the USA). The results demonstrate that CRT reclaims production has a lower True Price gap than synthetic or natural rubber production, reflecting the circularity of the reclaim. Comparing the value chains of these three products highlights which value chain steps put stress on planetary boundaries and respect for human rights. These insights help to accelerate the resource transition towards a circular economy with respect to people and nature.
Want to hear more about our work on circularity and the transition to sustainable materials? Read more about our work.
TOWARDS REGENERATIVE BUSINESS WITH IMPACT MEASUREMENT, REPORTING AND STEERING
econic‘s mission is a world without emissions, so their ambition is to turn every house into an e-home. In order to meet the EU emission targets for 2030 in The Netherlands we need to transform 1000 houses per day – from now on – into e-homes. That is an immense task. econic’s mission stands for meaningful entrepreneurship in the energy transition, which requires steering on value creation towards the promise of a regenerative business.
Impact Institute and econic cooperated to explore impact and impact measuring at econic. This project consisted of four elements: 1. translating econic’s mission in terms of impact. 2. analysing the value creation from econic’s activities with a value creation model, 3. qualitatively estimating econic-specific impacts with an impact hotspot on six capitals and six stakeholder groups, and 4. executing an impact measurement by quantifying the impacts ‘contribution to climate change’ and ‘avoided contribution to climate change’. A deep-dive into these impacts included insights into the production vs the use phase of heat pumps and differences between client groups.
Benefits to the client
The goal of the project was for econic to get more grip on impact: What is impact? Where can econic exert influence? What does that mean for econic’s business and ambitions? By quantifying impact, econic’s ambition becomes measurable. In addition, econic can communicate on impact towards stakeholders, and eventually steer on impact. Impact measuring also provided insights into societal value added of different products and business propositions (e.g. existing build versus new build, solar panels, collective systems, insulation). The deep-dive furthermore resulted in strategies and metrics for econic to create more value. During this project, several workshops were held in order to capitalise on knowledge transfer. Reporting and steering on impact are the next possible steps towards long term integrated value creation.
IMPACT DUE DILIGENCES FOR ABN AMRO SUSTAINABLE IMPACT FUND
Independent review of the impact alignment, opportunities, and risks of potential investments
The Sustainable Impact Fund (SIF) of ABN AMRO invests in companies and early-stage projects. With a commitment of EUR 425m, funded and managed exclusively by ABN AMRO, it invests through direct equity investments in key transition sectors, contributing to accelerating the transition in the energy, circular and social impact pillars. The investments are split across mature companies with a proven business model and venture investments in young companies with a proven concept.
Value for the organisation
The Impact Due Diligence (DD) projects complemented the fund’s commercial DD processes by investigating the potential societal value added of the investees and helping understand any potential risks of unintended negative impact(s). The results of the Impact DDs were used by the organisation as input to the investment decision process in support of its mission to bring a real positive impact on society.
How was impact measurement applied in practice?
Several Impact DDs were conducted on potential investment opportunities in various sectors. Although the scope of the DDs varied, some example activities that were performed included:
- Review of mission, purpose, and Theory of Change (ToC)
- Review of governance, processes, and infrastructure in place at the investee to measure and track the intended impact in line with the ToC
- Perform quantitative impact assessment for a selection of the most material positive impacts and (potential) negative impact risks.
Each DD provided recommendations to improve and strengthen the impact management practices at the investees.
For more information about Impact DDs, contact Roland van Keeken (email@example.com).
A MODEL-BASED APPROACH TO ABN AMRO’S NEGATIVE IMPACT ON BIODIVERSITY
ABN AMRO is one of the largest banks in the Netherlands and it is one of the frontrunners in the financial sector in reporting on its value creation to society. ABN AMRO is publishing this biodiversity report in line with its purpose and strategy and in anticipation of expected EU regulations that will require financial institutions to provide insight into their impact on biodiversity.
Value for ABN AMRO
It is important for ABN AMRO to understand its biodiversity impact. This impact can also represent financial risk, according to the Dutch Central Bank (DNB). Over 50 percent of global GDP (gross domestic product) is “moderately or highly dependent” on nature and the goods and services it provides. Additionally, EU legislation in the pipeline for the coming years will focus not just on climate, but also increasingly on biodiversity.
By measuring and valuing impact on biodiversity, ABN AMRO is able to better understand its negative impact on biodiversity as well as which of the sectors within its portfolio generate the largest impact. The report shows how impact mainly comes about indirectly, through ABN AMRO’s supply chain and through clients and their partners.
The full report with definitions, general results, company specific results and geographic impact can be found here.
ABN AMRO’s newsletter mentions the importance of raising awareness about biodiversity impact.
How was impact measurement applied in practice?
The figure below shows the four biodiversity impact drivers in scope (climate change, air pollution, water pollution, and land use). The different drivers are expressed in a single unit: the loss of a hectare with pristine biodiversity (biodiversity ha), allowing for comparability. These steps aim to provide direction for decision-making, to help ABN AMRO identify important sectors, and to demonstrate progress, enabling the organisation to steer on impact.