The Principles for Positive Impact Finance posit that to achieve positive impact finance and business a holistic approach to impact analysis and management is needed, covering the three pillars of sustainable development (economic, environmental and social).
The Impact Radar is one of the first tools that were developed by the PII to implement holistic impact analysis.
The Radar offers a holistic set of impact areas across the three pillars, which can be used by private finance and business to understand and manage positive and negative impacts across the three pillars.
The impact areas are defined based on internationally recognized standards and definitions, including the SDGs.
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The PII has also initiated a set of Impact Mappings, based on the impact areas of the Impact Radar.
The mappings consider the positive and negative associations between sectors (e.g. car manufacturing) and impact areas (e.g. resource efficiency), as well as the level of country needs vis a vis impact areas (e.g. Morocco and employment).
The mappings have been based on internationally recognized standards and research, and have benefitted from early trialing and refinement as part of the development process of the PII’s Impact Analysis Tools.
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Frequently Asked Questions
Why aren’t the impact areas and the SDGs one and the same thing?
Many impact areas and SDGs are the same: food, housing, climate, to name but a few. Some SDGs are impact areas while others are systems; they are a collection of several impact areas – sustainable cities for instance. Other SDGs are akin to indicators of other SDGs; thus poverty is in many ways an indicator of ‘reduced inequalities’ and ‘decent work’. In other cases an impact area is spread over more than one SDG, such as biodiversity and ecosystems, which is reflected in life below water and life on land. For the purpose of impact analysis it is important that impact areas be specific and distinguishable from each other, hence the existence of the Impact Radar, even if it is based on and covers all the SDGs.
Which sector classification is used in the sector-impact mapping?
The sector mappings are based on the UN International Standard Industrial Classification of All Economic Activities (ISIC). ISIC forms the basis from which national industry classification codes have been derived. Correspondence tables between ISIC and most national industry classification codes are available. An automated code converter between ISIC, NACE, NAICS and ANZIC has been developed by the Frankfurt School of Management and can be accessed here.
How are country needs mapped?
Country needs are mapped using international data and statistics produced by multilateral organisations such as the UN, World Bank or the OECD. Such resources have been identified for each of the impact areas in the Impact Radar. Each country’s data is considered and its level of need vis a vis each impact area is ranked accordingly: low, moderate, high or very high.
What are the use cases of the Radar and the Mappings?
- The impact areas of the Impact Radar and the Mappings are an integral part of the PII Impact Analysis Tools.As per the figure below, both tools consist of two components: a workflow and the mappings, which act as a set of in-built resources.
- The Radar and Mappings can also be used independently of the PII tools, as input to other processes, methodologies and tools.