Understanding how to effectively analyse impact is critical to addressing the social and environmental challenges confronted by corporations, governments, investors and society in today’s world.


Presented in the form of economic value, quantifiable volumes and qualitative ranks, our approach enables stakeholders to identify, measure, value and manage their material risks and make informed choices.

The Four Capitals Framework

Our standard framework for analysis is based on the well-established approach of identifying impacts through changes in four capitals – natural, human, social and financial – these are well-established economic paradigms. However, our approach is based on the measurement of impacts at the actual asset level and lends itself to any of the alternative paradigms that users may be interested in, such as the UN Sustainable Development goals (SDGs) and the EU's regulatory

framework for sustainable investment.


Natural capital

Natural Capital consists of the limited stocks of physical and biological resources found on earth, and of the limited capacity of ecosystems to provide ecosystem services (TEEB 2010)

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Human Capital includes the knowledge, skills, competencies and attributes (e.g., health) embodied in individuals that facilitate the creation of personal, social and economic well-being (OECD, 2001)




Social Capital consists of the productive value of social connections, where 'productive' is understood not only in the narrow sense of the production of market goods and services, but in terms of the production

of a broad range of

well-being outcomes.


Financial capital

Financial Capital comprises of all manufactured capital, such as buildings, factories, machinery, physical infrastructure (roads, water systems), as well as all financial capital and intellectual capital (technology, software, patents, brands, etc.)

What do we measure?

Four Capitals & Three Levels of Ownership

The four capitals – natural, human, social and financial – are well established economic paradigms.

Our framework - four capitals and three levels of ownership - for impact analysis, is consistent with the ‘inclusive wealth’ approach at the macro-economic level adopted by UN Environment’s

Inclusive Wealth Report.

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One of the key principles used in accounting is materiality. Materiality helps to focus on issues which are the most important, and whose inclusion or exclusion can potentially affect decision making.


All identified material issues have underpinned risks. The purpose for materiality is identifying areas for key risks requiring measurement and management.


Material issues lead to risks ranging from regulatory, operational, market, and reputational. All material issues directly or indirectly can have financial implications on

business performance.

externality drivers

A driver is a flow which arises from the activities of agents (i.e. governments, corporations, individuals) in eco-agri-food and business value chains, resulting in significant outcomes and leading to material impacts.


A ‘driver’ can have multiple outcomes leading to both positive

and negative impacts.


For analysing the impacts from business activities, the first step is to express or measure these drivers in quantitative or qualitative terms. For example, release of air pollutants from cement manufacturing plant (drivers) leads on change in atmospheric concentration of Nitrous and Sulphur oxides (outcomes), which can be associated with multiple impacts including those on human health, damage due to acid rain, etc.


GIST's framework incorporates most material impact drivers across four capital classes (natural, human, social and financial).


The impact drivers under each capital category can be seen in this chart.

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how do we measure?

Drivers-Outcomes-Impacts Framework

All impact drivers have cause and effect pathways which provide the relationship between the impact ‘driver’, the change which it creates in stocks and flows of four capital categories, also called the ‘outcome’, and finally a positive or negative contribution to one or more dimensions (environmental, economic, health or social) of human well-being; called an ‘impact’.

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One of the key challenges with performance tracking using multiple indicators, is that each indicator has its own appropriate unit for measurement. Cross-comparability among these measured quantities with different units is often not feasible. For example – comparison between tonnes of particulate emissions to volume of water consumed is not possible.

Impact valuation in economic terms helps bring all the impacts into a single metric i.e. Dollar value impact ($) which takes into consideration the cause effect pathways, who gets affected and how they get affected.

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IP&L is a performance and management framework that helps managers to design appropriate responses to global and local business threats, drive sustainable growth and deliver measurable value to stakeholders.

Measuring externalities along multi-capital components provides companies with a holistic evaluation of corporate performance and helps drive sustainable business growth for both business and society via:

✔   Developing strategies to decouple business growth from environmental damages

✔   Quantification of impacts of company policies and business models on stakeholder communities

✔   Measuring returns on investment (RoI) for investments made in technology, employee training and corporate social responsibility (CSR)

SDG Mapping

The economic value of externalities measured and reported as part of GIST’s analysis can also be viewed as contributions (positive and negative) towards achieving the SDGs, as defined by the United Nations. Enabling companies to demonstrate quantifiable contribution

towards SDGs. 

GIST maps impacts to SDG targets and aggregates them at the Goal level. Redistribution of an impact value across SDGs is done based on weighted composition of the mapped targets.

Impact on SDGs

Impacts in USD Million