Menu

WORLD CITIES SUMMIT 2022

Impact-Weighted Accounts: Towards Creating Sustainable Value and An Impact Economy

The Impact-Weighted Accounts Framework (IWAF) can be used to accurately assess both positive and negative environmental, social and governance impacts of an organisation’s business activities and investment beyond financial metrics.

Overview

Despite rapid economic growth and increasing interest in impact investment worldwide, less attention has been paid to whether this growth is sustainable for people and the planet. Most firms today prioritise the creation of financial value for short-term profit, at the expense of society and the environment.

The IWAF can be used to accurately assess both positive and negative environmental, social and governance (ESG) impacts of an organisation’s business activities and investment beyond financial metrics.

Relevance and Benefits of the Impact-Weighted Accounts Framework

  • - The Impact-Weighted Accounts (IWAs) help organisations to assess how they create or reduce value for society in a holistic and consistent way.
  • - IWAs supplement the financial performance of an organisation with its positive and negative impacts on employees, customers, the environment and broader society.
  • - In doing so, it also helps governments control the environmental and societal effect of organisations within their jurisdiction.
  • - It aims to fill the gap of a missing international standard that ensures complete and consistent impact assessment including all capitals and stakeholders.
  • - In shaping the organisation’s way of accounting and reporting, it allows investors to make more future-fit investment decisions.
  • - The IWAF helps organisations measure their impact in such a way that the information can be used in decision-making in order to safeguard quality and consistency.

Lead Researcher: Assoc Prof Liang Hao (SMU Lee Kong Chian School of Business)

Learn more about the principles of IWAF here . Access the full white paper here .

This study was featured at SMU’s booth at the World Cities Summit 2022 exhibition.

Newsletter Subscription