A banking for Impact consortium that includes Harvard Business School, Impact Institute, ABN AMRO, Danske Bank, DBS and UBS is hoping to accelerate the transition toward a sustainable economy by adopting impact-reporting standards that account for social- and environmental factors.

The Banking for Impact initiative aims to create new reporting standards for financial firms known as impact measurement and valuation (IMV), helping to drive sustainable economic decisions.

Publishing its Vision Paper, the group has outlined its plans to build an IMV approach that includes the quantification, valuation, attribution and aggregation of impacts for the financial sector. Such scalable standards do not yet exist for financial firms. The consortium, led in partnership with academia, called on other financial firms to join its ranks in reshaping the economy with sustainability at the core.

Harvard Business School has published research on IMV since launching the Impact-Weighted Accounts Initiative (IWAI) in 2019. Recent Harvard research monetising the impacts of over 1,800 public companies’ operations revealed a significant relationship between negative environmental impacts and lower stock market valuations, underscoring the strong business case for greener business models.

Sir Ronald Cohen, Chairman of IWAI and the Global Steering Group for Impact Investment, said: “The sooner banks embrace impact measurement, the sooner they can meet rising expectations for responsible behaviour. Impact transparency will focus banks on providing solutions for people and planet, rather than financing the creation or aggravation of problems. This will redefine banking success to include both profit and impact performance, improving lives and the planet.”

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