Module Overview
How do investors translate impact goals into an impact rating? Where do they start?
Modules 6 through 12 provide a step-by-step guide of the key concepts, questions, and challenges involved in building an impact rating, using an impact rating template built on the Five Dimensions of Impact framework from the Impact Management Project.
This module addresses the What dimension. This dimension incorporates the relative priority that investors assign to different kinds of outcomes into the way they assess an investment’s impact. Ideally, these priorities are informed by the views of the affected stakeholders.
The What dimension of investors’ impact goals can vary in scope: some may focus on a specific outcome (e.g., GHG emissions), some may focus on a specific impact theme that includes multiple outcomes (e.g., education), and some may consider a broad range of outcomes related to a number of different impact-themes (e.g., the Sustainable Development Goals)
The scope of your impact goals will inform how you set up the What dimension of your impact rating, and that in turn will inform how you set up many of the other dimensions
Key concepts in the What dimension:
Outcome: the level of social, environmental, or economic well-being experienced by stakeholders that results from an action or event
Impact: the change in outcome experienced by stakeholders, positive or negative, caused by an organization
Output: the product or service provided by an organization’s activities that affects stakeholder outcomes, which organizations can affect directly
Sequence Overview - Building an Impact Rating
Before we get started, we’ll breakdown how we’re going to work through each dimension of our our impact rating template over the next seven modules.
Key Concepts: Impact vs. outcome, output vs. outcome
People often use the words ‘impact’ and ‘outcome’ interchangeably. When setting up the WHAT dimension of your impact rating, you can avoid confusion by using each of those terms to have a specific meaning.
Building an Impact Rating: What
The What dimension of an impact rating prioritizes investments based on the kind of impact they are associated with. In this section of your impact rating, you will translate the What dimension of your portfolio-level goals into a set of scoring criteria that you will use to evaluate the What dimension of an investment’s impact.
