NEW for June 2021:
- The Investment Portfolio Impact Analysis Tool was developed to enable financial institutions to holistically identify and assess the impacts associated with their investment portfolios. It requires users to input data about the nature, content and context of their portfolios. A set of in-built impact mappings is then combined with this data to help users identify the most significant impact areas of the portfolio and to reflect on their current impact performance , thus setting the basis for strategy development and target-setting.
- The Real Estate Impact Analysis Tool was developed to enable financial institutions to holistically identify and assess the impacts associated with real estate investments and portfolios. There are multiple use cases for this kind of analysis, including: decision-making and due diligence in the context of asset acquisition; fund/portfolio review and management; impact target-setting as well as impact & SDG reporting.
UNEP FI’s work on the SDGs and impact
The attainment of the SDGs is a cross-cutting aim for UNEP FI, whether through its industry standards (such as the Principles for Responsible Banking) or its thematic work (such as the Asset Owner Alliance or the Natural Capital Finance Alliance). In addition, as a means of driving convergence across industries and topics, UNEP FI has created the Positive Impact Initiative.
UNEP FI’s Positive Impact Initiative
The Positive Impact Initiative (PII) is a think-and-do-tank within UNEP FI exclusively focused on closing the $2.5 trillion SDG financing gap.
Based on a unique theory of impact, PII works with finance sector representatives and other stakeholder groups to mainstream impact analysis and management in business and finance as a cornerstone to financing the SDGs.
A unique theory of impact
PII’s work is anchored in the idea that the SDG financing gap is first and foremost a business model gap. For most current business models, positive and negative impacts to people, planet and the economy are externalities and are therefore considered as a cost centre. PII’s approach is based on the idea that there is an as-yet unexplored potential for positive impacts to generate revenues and be the heart of business models. PII believes that new, impact-based business models can significantly decrease the cost of achieving the SDGs and give rise to business and financing solutions at scale, including in emerging and developing economies, where needs are most acute.
A better understanding of impacts is therefore essential for business strategy. PII advocates and develops solutions for impact analysis and management in mainstream business and finance to bring these ideas to life.
- Read Rethinking Impact Rethinking Impact to Finance the SDGs, our 2018 position paper and call to action, lays out the thinking behind the Initiative.
- Read the 2015 Positive Impact Manifesto.
Principles for Positive Impact Finance
Released in 2017, the Principles for Positive Impact Finance provide a high level framework to enable finance and its public and private stakeholders to analyse and manage impact across the economy, as the starting point to improve the impact of existing businesses and to stimulate the emergence and growth of new, impact-based business models.
The Principles define Positive Impact Business & Finance as “that which serves to deliver a positive contribution to one or more of the three pillars of sustainable development (economic, environmental and social), once any potential negative impacts to any of the pillars have been duly identified and mitigated.”
This definition is inclusive – it is relevant to all sectors of the economy, and to all types of financing – and it is holistic – it covers the three economic, environmental and social pillars of sustainable development at the heart of the SDGs, from both positive and negative impact angles.
These characteristics are intended to help set the basis for a common language across the investment chain.
Holistic impact analysis & management
The Principles stipulate that to deliver Positive Impact Business and Finance, entities (financial or non-financial) need adequate processes, methodologies, and tools, to manage the impacts of their activities.
To support this, the PII has devised an Impact Radar that maps the specific impact areas business and finance can have a positive or negative effect on. It provides a holistic set of impact areas across the three pillars of sustainable development and in full alignment with the SDGs.
The PII has also developed Model Frameworks for holistic impact analysis and management.to provide guidance on integrating impact considerations into business processes and decision-making, as well as prototype tools to implement the guidance.
The Impact Journey
The PII’s holistic approach has two aims: to improve the impact performance of existing business and finance (increase positive impacts and decrease negative impacts), and to support the emergence of new, impact-based business models. These transformations will not happen overnight. The PII has sought to provide a solid foundation for all stakeholders through the high-level framework of the Principles, as well as a first set of tools to help them progress on this journey.