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Total Impact Measurement and Management
There’s a mounting need for business growth that’s inclusive, responsible and lasting. This requires a measure of business success that goes beyond financials.
Our Total Impact Measurement and Management (TIMM) framework provides a new language for decision making. Instead of relying on shareholder return alone, it incorporates and values a number of non-financial impacts. It’s holistic view of what businesses need to understand risk, identify opportunities and maintain a positive impact on society.
We’re helping companies to recognise their overall contribution, to understand the balance between the positive and negative impacts generated across their infrastructure and supply chains. By valuing social, environmental, and economic impacts, business leaders are now able to compare the total impacts of their strategies and investment choices.
How TIMM can present the trade-offs and support Board decision making
Presented by Malcolm Preston, former PwC Global Sustainability Leader
Introducing the four TIMM quadrants
Social Impact
Measures and values the consequences of business activities on society such as health, education and community cohesion
Environmental Impact
Puts a value on the impact business has on natural capital eg. emissions to air, land and water, and the use of natural resources
Tax Impact
Values a business’ contribution to the public finances, including taxes on profits, people, production and property, as well as environmental taxes
Economic Impact
Measures the effect of business activity on the economy in a given area, by measuring changes in economic growth (output or value added) and associated changes in employment.
We live in a world of significant change and upheaval. We have a growing population, seeking a better lifestyle, to be delivered from a planet with finite resources, many of which are now rapidly running out.
At the same time, the expectations placed on businesses about the role they should play in society has shifted amongst stakeholders including customers, suppliers, employees, governments and society in general. Many business models and practices are not equipped to deal with the new requirements, and many sectors recognise that they need to transform if they are to thrive in the future.
These changes are already affecting corporate decision making and reporting, but until now, it’s been hard to quantify and monetise social and environmental impacts, leaving them stranded outside traditional accounting and return on investment decisions. Yet, more than 93% of CEOs we surveyed said that measuring both their financial and non-financial performance would enable them to better identify and manage their risks. We developed our TIMM framework in response to this need.
- Are you creating value for your stakeholders?
- Will your business strategy have a positive or negative impact on society, the environment and the economy?
- Given competing priorities which trade-offs will your business make?
What is TIMM? TIMM helps private and public sector leaders to understand how different activities contribute to the economy, the environment and society. It provides a more complete assessment of how value is generated (or potentially destroyed) in both the short and long term, helping decision makers to consider the net impact of their actions, beyond financial results. Some of our clients have already recognised the potential of evaluating their total impact, including companies in travel and tourism, fashion, chemicals, utilities, consumer goods, and mining.
The TIMM ‘wheel’, shows a business’s activities at its centre, surrounded by the stakeholders who are affected by its operations (the grey circle). Each of the impacts is then represented around the outside of the ‘wheel’. TIMM values the impacts of a business arising in three ways:
Direct impacts: from a business’ own activities
Indirect impacts: recognising that a business has responsibility for some of the impacts of organisations in its supply chain – impacts associated with the manufacture of goods consumed by the business, for example
Induced impacts: the effects of spending by a business’ employees, or suppliers’ employees, in the wider economy
The impacts are grouped into four areas, each comprising five indicators. Once calculated, impacts are represented on the wheel using bars sized proportionately to the value of each indicator, green for positive impacts, or red for negative impacts.
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