Generation Impact

Cover of Generation Impact

International Perspectives on Impact Accounting



Table of contents

(26 chapters)

Introductions for Impact


As social, environmental and economic challenges grow across the world, the imperative for managing, measuring and maximising impact has never been greater. With growing evidence of increasing inequality and climate change there is a critical need to adjust economic growth models to embrace inclusiveness and sustainability. Companies and institutional investors are recognising that social and environmental factors can influence a company's bottom line in both positive and negative ways, and therefore are important elements in business, markets and competition. However, to address the growing environmental and societal challenges as well as make progress on the Sustainable Development Goals (SDGs), more focus is needed on actions and investments that seek measurable positive impact that result in increased well-being of stakeholders. A plethora of new frameworks and tools has been developed to measure societal and environmental factors. To date, these efforts have served as complements to existing economic models. For public and private actors to be able to make more effective resource allocation decisions, these broader sets of measures need to be integrated into existing accounting and economic models. Over the past several years, there has been growing momentum for action. There has also been a recognition that no organisation or sector can tackle these challenges alone. Business, government and civil society need to collaborate to take action that can have the urgently needed impact at scale.

Managing for Impact


This chapter describes the journey of the Furniture Resource Centre Group, a social enterprise based in Liverpool in the UK, to continually seek to create increased social value. By putting what our stakeholders' value at the forefront of the mission, the Group has adapted, and succeeded (and at times failed) to increase the value of activities to those that matter most. This has seen the Group recognised as a leader in managing the impacts of its activities – winning countless awards – but maintaining a relentless drive to create more value, the Group will never stop working to improve what they do. The lessons here will help enterprises of all forms to see how social value can be at the very centre of what they do.


Founded in 2015, the Impact Valuation Roundtable (IVR) is an informal group of companies who wish to operationalise the emerging field of Impact Valuation. IVR participants consider Impact Valuation a groundbreaking approach to measure and value the effects of business activities on the health and well-being of people and the planet – in economic, environmental, social and human dimensions.

Impact Valuation can support large and small companies alike. It uses the language of business, supports strategic decision-making by adding fact-based insights into business operations and strengthens the communication and engagement of business with stakeholders. This is showcased in case studies from adidas, Ambuja Cements Limited, BASF, Cementos Argos, Maersk, Natura, Novartis, Syngenta and UPM.

Although there is an increased recognition of the benefits of Impact Valuation, comparability in the calculation and communication of the results of Impact Valuation assessments across companies is one of the key challenges to the credibility and uptake of the concept. The IVR supports and encourages the development of consistent frameworks and standards that strive for maximum commonality across industries, pragmatism in their application, and allow for scaling up.

As importance and interest rises, the IVR continues to welcome other practitioners willing to contribute knowledge and experience to accelerate convergence and mainstreaming of Impact Valuation.


Collecting data on social impact and using it in decision-making process in organisation in order to maximise the social value created for people unfortunately is not yet the common practice among social impact actors in Turkey. While the importance of allocating the resources in the most impactful way grows due to the pressing need to tackle increasing social inequalities, the social impact management practices of organisations aiming to contribute to the solution and create positive social impact lag behind. The chapter presents the current approaches and practices on social impact measurement and management of social impact actors in Turkey based on experience of Koç University Social Impact Forum.


Working in relationships of mutuality is a necessary precondition for success in any collaborative and systematic effort to improve peoples' lives. Keystone Accountability has been working for a decade to develop simple, low cost and actionable measures of performance based on the experience and perceptions of key constituents – and ways of using these data in generative dialogue to deepen insights, strengthen relationships, foster ownership and agency and improve the outcomes of development interventions. They call this method and its accompanying toolbox Constituent Voice.

This chapter briefly explores Keystone's journey of discovery and what they have learnt about using feedback loops (metrics plus dialogue) to better understand and strengthen relationships, performance and emergent impacts in development assistance.


Social entrepreneurs want to help solve social and environmental issues by applying entrepreneurial solutions. However, social entrepreneurs usually find it more challenging to measure their success because of the metric that is being measured is not only for financial gain but also for social and environmental change. The analysis of how they manage and achieve their impact goals, which are restricted by limited knowledge and resources, is unfortunately not always the highest priority particularly in the early stage of their entrepreneurial journey.

Frequently, by generating social and economic value, business decisions and actions are in opposition (Dawan & Alter, 2009). This opposition translates into calculated trade-offs. At times decisions may be adequate that forsake social impact in order to gain market share or increase profit margins and increase social value creation in the long run. Conversely, the scope of social impact may be expanded at a financial cost (Braun, 2020).

What also often happens in our experience is that more social businesses claim their impact without clear justification based on measurement. And even worse is that many social entrepreneurs are not equipped with the right mindset and tools to understand how to measure, manage and maximise their impact.

Also, the situation with COVID-19 pandemic makes it even more pressing now that businesses must be held accountable for their actions; decisions solely relying on financial gain are even less relevant during this time. The pandemic will likely create even more inequality, with evidence emerging that those at the bottom of pyramid are being more severely affected. Casualties will be even more with the virus spreading faster on the bottom-of-the-pyramid communities, and we have seen that hospitals and proper medical care are being allocated improperly with several privilege for some people with more resources. The implication of these inequalities will have a profound impact on every level and aspect of communities.

Here in this chapter, we will discuss the challenges through our experiences in practicing impact management and why it's very important to be done at all levels of the entrepreneurial stage even from the upstart and what can be done better to help social and all entrepreneurs to strive.


When it comes to measuring and managing corporate impacts on the multiple capitals (financial, natural, social, human and built), Impact Management and Impact Valuation have emerged as best practices in the interrelated fields of corporate social responsibility and Environment, Social and Governance (ESG) investing. These practices have two significant shortcomings that are largely unacknowledged: they don't attend to ecological and social thresholds (or the carrying capacities of capitals); and they assume impacts on the various capitals are fungible, and therefore impacts on one capital can substitute for impacts on another capital, which clearly does not reflect reality.

This chapter proposes solutions to both gaps: respect ‘critical capital’ thresholds to retain vital capital stocks necessary to fuel continuing flows of value (and avoid systemic collapses of capital resources), and aggregate impacts across capitals via the common factor of ‘progress towards sustainability’. These steps will mature the fields towards the creation of System Value, where capitals are continually regenerated sustainably in ways that support healthy living systems.

Investing for Impact


One decade since its birth, the impact investing market has grown exponentially to several hundred billion dollars. Although promising, this figure is dwarfed by the major financing gap that still remains if we are to meet the world's sustainable development needs. In order to scale and capture the hundreds of trillions of private capital available for social good, it will be crucial to address the biggest question in impact investing today: who is willing to take on risk? Specifically, who is willing to take on the risk of innovation; the risk of valuing women and the underserved in financial markets and the risk of giving a voice to the voiceless? This chapter examines a novel ecosystem approach, developed over the past decade by Impact Investment Exchange (IIX) to address risk and find solutions to it at multiple levels of the social capital markets value chain. By incorporating the voices of underserved beneficiaries in impact assessments; providing impact enterprises with technical assistance, investment readiness and capital raising support and using innovative financial mechanisms to catalyse greater change, IIX has unlocked millions of dollars of investment capital while improving the risk–return–impact profile of investments. To lead impact investing in the long term, those in the sector must similarly learn to embrace and address risk through creative, practical and inclusive approaches that give voice and value to society's most vulnerable.


Through its effect on the cost of capital, impact investing has the potential to improve the pricing of externalities, reducing the current overproduction and consumption of goods with negative social and environmental impacts and stimulating production and consumption of goods with positive social and environmental impacts. For this potential to be realised, the design of impact investing needs to be better aligned with portfolio management in two respects: (1) it needs to be possible to assess the impact of both asset classes and individual assets and (2) the analysis of the characteristics of assets needs to be separated from the use of mandate-related screens.


This chapter examines ways harm can be done and prevented in Social Investing. It uses a case study based on a real deal to tell a cautionary tale and provides tools to help philanthropist and impact investors find their moral compass through community feedback.

Policy and Commissioning for Impact


Since the introduction of the Public Services (Social Value) Act 2012, there has been a common misconception that Social Value is inherently about Procurement. We think that the process of Procurement is a means through which questions can be asked around Social Value commitments; however, Social Value should come into dialogue way before a tender exercise. It must be at the forefront of political visioning, strategy development, officer behaviour and the design of goods and services. In this chapter, we explore how Public Authorities and other Anchor Institutions can embed Social Value into everything they do, utilising Commissioning and Procurement as the basis.


The social value movement emerged in the 1990s from a desire to demonstrate the value of investment in people and society. To demonstrate, evidence or proof is required, thus the focus on measurement is central to the social value movement.

In addition to measurement, understanding and valuing impact upon all stakeholders is a core theme of the social value movement. With measurement, it is more possible to see when an action has led to increased inequality or has negatively impacted the environment. With measurement, one can identify opportunities to improve societal well-being.

In procurement, thinking about impact from the view of all stakeholders will illuminate pathways to achieving maximum positive impact. The journey towards the goal of achieving maximum impact begins at the design stage of the procurement process and will be informed by stakeholder experience overtime.

We should be demanding evidence of maximum positive impact – from our governments and government-funded institutions, and from all corporations and service providers. Building maximum impact capacity among purchasers of services is equal in importance to building measurement capacity at the service delivery level.

The act of procurement offers a tremendous opportunity for positive environmental and social impact. Measurement will inform and guide us on how to maximise that opportunity. This is essential if we are to successfully repair and sustain the planet. Real sustainability requires us to address inequality and to actively improve well-being in order to meet the goal of addressing climate change.


This chapter touches upon the key problems associated with impact measurement in Russia that need to be addressed by grant makers to approach impact in a reasonable way and empower their grantees not to report only complete and utter success but to actually measure and manage their impact. It encourages open dialogue between grant makers and grantees on what impact actually is, why it is important to measure and how impact data can be used for decision-making, because so far in Russia there mostly have been two separate discussions on the subject.


As the world continues to grapple with new and existing challenges every passing day, the need to identify new approaches to maximise impact with given limited resources has become a pressing issue. To this end, overhauling the purchase and delivery of public services by introducing new funding models like commissioning has gained significant attention within the public and policy sector in recent years. Commissioning does not mean merely procurement and purchasing but securing the most appropriate services to address the needs of the population through due diligence and planning to maximise value. Although Commissioning has been practised internationally for many years, it has emerged at scale in New Zealand through the establishment of the Whānau Ora Commissioning Agency. This chapter discusses the Whānau Ora Commissioning model and its development as an indigenous model to commissioning for impact. It highlights the unique characteristics embedded in and exhibited by the model, which enable it to function in an indigenous context and facilitate positive well-being for its population. It also describes the challenges faced to perform and drive momentum forward. Commissioning may not be the only solution to resolving societal challenges. However, it can be instrumental in generating and amplifying value tailored to the context and used in conjunction with other innovative practices.


This chapter provides an overview of the social policy development and assessment in East Asia. Our study shows that social policy assessment in this region is still relying on objective indicators and interviews, even though most of the regional governments have implemented the Regulatory Impact Assessment for improving regulation quality. General approaches to measuring social value such as Cost–Benefit Analysis, Cost-Effectiveness Analysis and Social Return on Investment are not commonly used in the formulation of social policies. We compare the features of these approaches and provide suggestions about how to embed social value assessment tools into social policy and strategy development process.

Assuring for Impact


Assurance and audit are a necessary part of the ecosystem for financial accounting and performance management. We may take it for granted but the role of assurance and audit is crucial in supporting decision-making and enabling the global economy to function. However, if we want the global economy to make decisions differently, so that social and environmental value are factored into decision-making alongside financial value, then we need the same level of scrutiny and confidence in this information as well.

This chapter first outlines a short history and purpose of assurance exploring how important it is for building trust and credibility in information that is used for decision-making. It then explores accountability and how assurance doesn't play as big a role as it should in (social and environmental) impact accounting. Crucially, raising the issue that most people who experience the social and environmental impacts do not have the mechanisms to hold an organisation to account for this impact. This is creating an accountability gap and is leading to increased inequality.

This chapter then briefly outlines the current state of impact assurance including reference to key legislation and frameworks that do exist. This chapter concludes with some recommendations on how the demand for assurance of nonfinancial value can be increased and how it can be improved in terms of accuracy, completeness and most importantly so that it is being provided on behalf of the people (with little or no power) who experience the impacts.

Networks for Impact


There is good collaboration and there is bad collaboration. Which one do you want to do? Through the experience of the Natural Capital Coalition, the 10 steps for good collaboration are set out to help us work with others to achieve more than we can alone.


As a result of its history, South Africa faces many structural issues, the most common of which is unemployment, which reinforces issues related to poverty and social and economic inequality within its borders. Organisations such as the Aspen Network of Development Entrepreneurs (ANDE) provide a method of solving for this by convening a network of intermediaries who believe in their vision; to propel entrepreneurship in emerging markets to eradicate poverty. Organisations based in South Africa who are part of the ANDE network, share this sentiment and believe their contribution will be more impactful through collaborative methods that help entrepreneurs reach their highest potential. This chapter includes insights from four of these member organisations, namely Riversands Incubation Hub, Property Point, the Allan Gray Orbis Foundation and Impact Hub Joburg. All organisations work to foster entrepreneurship. However, their interventions challenge ‘standard’ methods of business development, particularly because they place the entrepreneurs they support at the centre of their programme design. As this chapter demonstrates, there is no single way to foster entrepreneurship and break the cycle of poverty; however, interventions cannot be successful without truly placing the entrepreneur at the centre.


Naina Subberwal Batra, CEO and Chairwoman of Asia's largest social investment network, explores why and how a resilient ecosystem is crucial in this time of global fragmentation and increasing disparities. In Asia, particularly, it has never been more urgent to take collective action as we face the sobering prospect that the region is unlikely to meet any of the UN Sustainable Development Goals by 2030. Bringing together people towards a common vision, however, takes more than just good chemistry; harnessing that convening power to create democratic solutions requires a blend of trust in the face of unfamiliarity, critical reflections amidst business-as-usual and innovation to move capital effectively towards impact.


In a moment where social issues around the world are becoming more and more severe, a call for real impact is very much needed. Current investment into societal solutions that work at scale is not sufficient to get us closer to achieving the Sustainable Development Goals. Additional capital is required, but it is also essential that it is deployed in ways in which impact is maximised. Focussing on additionality – not just intentionality – and on impact management – not just impact measurement – represents the right direction.

EVPA embarked in a journey towards redefining the impact investment space to clarify the role of different investors. EVPA identifies two main strategies: investing for impact and investing with impact. Investors for impact are those that support innovative ways to tackle societal problems and embrace impact management, using the data collected to refine activities to maximise social impact.

However, despite all the frameworks and guidelines produced in the field of impact measurement and management in the last 10 years, the perception among the community of investors for impact is that there is still a lot to do, highlighting a gap between theory and practice. Investors' networks such as EVPA play a crucial role in filling this gap, supporting members (but not only) in the adoption of appropriate IMM practices. In this respect, EVPA has developed several responses (e.g., five-step IMM process, a training partnership with Social Value International, in-depth case studies) and is fully committed to strengthen its efforts in the years to come.

Scoping for Impact


This chapter is about helping you provide a solid platform for your organisation to engage with impact, by shining a light on what sits behind the decisions you make. This chapter will firstly set out why focussing on societal impact, whilst historically relevant, is really not a natural thing for today's organisations – in a sense, it goes against everything we have told ourselves about business for the past number of decades. At the same time, uniting the energy of an organisation to drive positive wellbeing impact is where the heart of the current revolution to address our multifaceted sustainability crises lies. It is a challenge we must rise to.

Many useful frameworks of sustainability/corporate responsibility maturity exist that can help us think about impact (e.g., Schaltegger, Hansen, & Lüdeke-Freund, 2015; Baumgartner & Ebner, 2010; Ainsbury & Grayson, 2014). This chapter extends this by delving deeper into the underlying economic mental models that structure existing organisational decision-making logics regarding impact. It outlines three archetypes of impact logic and the level of impact you would expect to be able to achieve if you operate from each one. All three sit within a ‘capitalist’ approach. Two of them are tightly bounded with neo-classical economic assumptions that have dominated business, the third marks a seismic break with these assumptions. In clarifying these archetypes, this chapter sets a trajectory that leaders can follow if they want to move towards delivering greater impact. The leadership lesson is that when it comes to delivering impact, if you want to go far, you have to go deep.

Business enterprises…are organs of society. They do not exist for their own sake, but to fulfil a specific social purpose and to satisfy a specific need of a society, a community or individuals.

Drucker (1974, p. 39).

Business enterprises…are organs of society. They do not exist for their own sake, but to fulfil a specific social purpose and to satisfy a specific need of a society, a community or individuals.


To catalyse the impact economy, we need a common language which unites the various disciplines covered by the universe of impact investing, including environmental science, sociology, anthropology, human capital, childhood education and development, workforce development, criminal justice, diversity equity and inclusion and more and which translates those into monetary estimates to enable decision-making, and to catalyse more sustainable and just outcomes. Impact accounting seeks to do just that by uniting the statements of an organisation's financial health and performance with monetised impact accounts that reflect the organisation's positive and negative impacts on employees, customers, the environment and the broader society. This chapter provides an argument for impact accounting, an implementation roadmap, and grapples with principles and ethics-based challenges for impact accounting.

Collectively, we can use impact accounting to demand accountability from the businesses from which we purchase or of which we are equity owners, either through from investment managers and our retirement accounts. We must demand that they start showing the impact-weighted earnings of their profits or the ‘true’ price of the product they produce.

Conclusions for Impact

Cover of Generation Impact
Publication date