Banks play a fundamental role in society and the impact they make has never been more relevant. We are faced with a global pandemic, a climate crisis and unprecedented biodiversity loss. Banks can be a force for good, but in order to make the right decisions they need real insight into their impact. Now is the time for banks to move beyond ESG indicators towards measuring the value they create for clients, employees, and the society that provides them with a license to operate. This helps banks to set themselves apart from their competitors.
Banks- as most businesses- have not measured their most important profit drivers: value creation to clients, to employees and to the society that provides them with a license to operate. Firstly, because it was not necessary: profit today was a sufficiently fine proxy for profit tomorrow. Secondly, until recently it was technologically not feasible. Both reasons for not measuring value creation do not hold anymore.
Due to technological and scientific advances, banks can now actually measure the value they create and are also well-advised to do so. In an ever faster changing society, there is no guarantee that what is profitable today is profitable tomorrow. In an economy that is ever more transparent and competitive, it is also not sufficient to promote the impression of value creation: you have to deliver actual value to clients and society – preferably in a way that sets you apart from your competition.
On 26 August 11:00 – 12:00 (CEST) we will host a webinar ‘From ESG to Impact: Impact as the hidden value driver for banks’ in which we explain why banks should start measuring value creation, how they can do so, and what it will deliver them. The webinar will include practical insights from, amongst others, ABN AMRO and DBS. The detailed program will follow at a later date.
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To help banks and other financial institutions measure their value creation for all stakeholders, Impact Institute will publish ‘Impact measurement and valuation for banks’ during the webinar. This report explains why banks should start measuring their impact, what that entails and how they can do it.
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