Impact assessment and measurement with Sustainable Development Goals

With the rapid growth of sustainable and responsible investment and widespread adoption of the environmental, social, and governance (ESG) reporting and integration by organizations, how to assess and measure ESG impact has become a critical issue. Although the UN’s Sustainable Development Goals (SD...

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Main Authors: LIANG, Hao, FERNANDEZ, David, LARSEN, Mikkel
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Language:English
Published: Institutional Knowledge at Singapore Management University 2021
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6713
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7712/viewcontent/Impact_Assessment_management_SDG_2021_wp.pdf
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spelling sg-smu-ink.lkcsb_research-77122022-02-25T06:59:05Z Impact assessment and measurement with Sustainable Development Goals LIANG, Hao FERNANDEZ, David LARSEN, Mikkel With the rapid growth of sustainable and responsible investment and widespread adoption of the environmental, social, and governance (ESG) reporting and integration by organizations, how to assess and measure ESG impact has become a critical issue. Although the UN’s Sustainable Development Goals (SDGs) provide a useful framework for investors and organizations globally to align their standards, the SDGs are vague on how to implement them at an organizational or activity level. Current practice relies heavily on third-party ESG rating providers, whose scores mostly apply to public equities only. They also suffer from biases, inconsistencies, and a lack of sufficient disclosure. Impact measurement is an alternative that grew out of impact investing that extends beyond public equites and circumvents many of the drawbacks of ESG ratings. However, despite its increasing popularity, impact measurement is still in its infancy and lacks standards that can be generalized across various business activities. In this chapter, we propose a new framework for impact assessment and measurement, leveraging our practical experience working with industry leaders from Singapore (DBS Bank) and the Netherlands (Impact Institute). Our framework focuses on quantifying, valuing, and aggregating the different kinds of impact - direct vs. indirect, absolute vs. marginal - for different stakeholders, and is highly implementable. It also helps organizations map the impact from their activities on various stakeholders to different SDGs, thereby providing a generalizable approach for organizations across sectors and countries. We define our conceptual framework and illustrate how it may be applied with a case study on measuring the impact of bank loans to the palm-oil and automotive sectors. 2021-04-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6713 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7712/viewcontent/Impact_Assessment_management_SDG_2021_wp.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University ESG Ratings Sustainable Development Goals SDGs Impact Assessment Impact Measurement Impact Valuation Impact Institute DBS Bank Asian Studies Finance and Financial Management Strategic Management Policy
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic ESG Ratings
Sustainable Development Goals
SDGs
Impact Assessment
Impact Measurement
Impact Valuation
Impact Institute
DBS Bank
Asian Studies
Finance and Financial Management
Strategic Management Policy
spellingShingle ESG Ratings
Sustainable Development Goals
SDGs
Impact Assessment
Impact Measurement
Impact Valuation
Impact Institute
DBS Bank
Asian Studies
Finance and Financial Management
Strategic Management Policy
LIANG, Hao
FERNANDEZ, David
LARSEN, Mikkel
Impact assessment and measurement with Sustainable Development Goals
description With the rapid growth of sustainable and responsible investment and widespread adoption of the environmental, social, and governance (ESG) reporting and integration by organizations, how to assess and measure ESG impact has become a critical issue. Although the UN’s Sustainable Development Goals (SDGs) provide a useful framework for investors and organizations globally to align their standards, the SDGs are vague on how to implement them at an organizational or activity level. Current practice relies heavily on third-party ESG rating providers, whose scores mostly apply to public equities only. They also suffer from biases, inconsistencies, and a lack of sufficient disclosure. Impact measurement is an alternative that grew out of impact investing that extends beyond public equites and circumvents many of the drawbacks of ESG ratings. However, despite its increasing popularity, impact measurement is still in its infancy and lacks standards that can be generalized across various business activities. In this chapter, we propose a new framework for impact assessment and measurement, leveraging our practical experience working with industry leaders from Singapore (DBS Bank) and the Netherlands (Impact Institute). Our framework focuses on quantifying, valuing, and aggregating the different kinds of impact - direct vs. indirect, absolute vs. marginal - for different stakeholders, and is highly implementable. It also helps organizations map the impact from their activities on various stakeholders to different SDGs, thereby providing a generalizable approach for organizations across sectors and countries. We define our conceptual framework and illustrate how it may be applied with a case study on measuring the impact of bank loans to the palm-oil and automotive sectors.
format text
author LIANG, Hao
FERNANDEZ, David
LARSEN, Mikkel
author_facet LIANG, Hao
FERNANDEZ, David
LARSEN, Mikkel
author_sort LIANG, Hao
title Impact assessment and measurement with Sustainable Development Goals
title_short Impact assessment and measurement with Sustainable Development Goals
title_full Impact assessment and measurement with Sustainable Development Goals
title_fullStr Impact assessment and measurement with Sustainable Development Goals
title_full_unstemmed Impact assessment and measurement with Sustainable Development Goals
title_sort impact assessment and measurement with sustainable development goals
publisher Institutional Knowledge at Singapore Management University
publishDate 2021
url https://ink.library.smu.edu.sg/lkcsb_research/6713
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7712/viewcontent/Impact_Assessment_management_SDG_2021_wp.pdf
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