• Join Managing Impact, our online discussion forum
• Register for an IMP huddle on 22 January at 15:00 ET / 12:00 PT or 24 January at 09:00 ET / 14:00 GMT
The IMP uses Managing Impact and its huddles to bring together enterprises and investors for debate around important technical topics related to impact measurement and management. Our last discussion covered impact monetisation, a form of impact valuation which assigns financial value to an enterprise’s impacts on people and the planet. This time we’re covering impact ratings, where the value assigned to impact is quantified but not monetised.
Impact ratings can help enterprises and investors to assess and compare enterprise impacts, and, in the case of investors, their own contributions to those impacts. When making capital allocation choices, these organisations will always need to implicitly make impact assessment and comparisons – impact ratings are a way to make these judgements explicit, and to make more impact-informed decisions.
But, as with all valuation techniques, impact ratings present their own risks and liabilities. One of the problems is that we don’t have standards for good practice, making it difficult for an enterprise or practitioner to know whether they are doing a good job.
As part of our consensus-building efforts, the IMP seeks to convene a community of impact practitioners to share views and experiences, so that we can improve these measurement techniques for all. We therefore invite you to respond to and debate the topic of impact ratings over the next few weeks, after which we will wrap up the discussion with two huddles at 15:00 ET on Wednesday 22nd January and 09:00 ET on Friday 24th January. The emerging debates will be summarised in a discussion paper that will be distributed throughout the IMP’s Practitioner Community.
Please consider some or all of these questions as you contribute to this discussion. Your ideas will inform the structure of the huddle and where consensus exists or is required:
• Under what circumstances are impact ratings helpful?
• How does the utility of impact ratings compare to other approaches to impact valuation?
• For those who are using impact ratings, what has your experience been? What are the some of the positive and negative aspects of this work?
• What are the characteristics of a ‘good’ impact rating? How would you know if you are ‘doing it right’?
• What are the characteristics of a ‘bad’ impact rating? How can they be avoided?
• To what extent does there need to be a commonality of methods for how enterprises and investors construct impact ratings, or are there necessary differences in how enterprises and investors approach impact ratings
• What can the IMP and others do to improve impact rating practices and support effective impact rating practices?
Please share your contribution to this important discussion.