Quantifying impact is not only possible, it’s essential.
Our methodology
To understand impact, we need to take into account a range of complexities. Consider a mobile phone: How much does it impact a person’s life? What about the environment? What if that phone is in the hands of a person in Denmark? Is it different if they’re in Uganda?
​
Vested Impact is designed to help you answer tough questions like these, which have typically been too hard or too expensive to estimate. Advances in big data, machine learning and AI have made it possible. Growing crises in issues like climate, poverty, inequality, and conflict have made it essential. Vested Impact has made it easy.
Although our reports are designed so that you don’t need to understand the methodology to use them, we keep the methodology transparent so you can delve into the details when you’d like to.
Here’s how it works
Vested Impact assesses impact based on the extent to which a business’s activities hinder or advance the United Nations (UN) Sustainable Development Goals (SDGs) and their 169 targets. The SDGs are globally recognised priorities for addressing the world’s most pressing social and environmental issues like education, health, poverty, climate, innovation, and gender equality.
​
The model defines an activity as any products or services a business produces, including any actions a business undertakes to operate them. It is aligned with leading methodologies and regulations for assessing impact, taking into account not just what a business delivers but also where, when, how much and to whom, as well as the criticality and extent of the need. Vested Impact leverages hundreds of millions of research papers and data points from organisations such as the United Nations, World Bank and OECD to credibly attribute and estimate the extent of the quality of a business’s impact on each SDG in each country it operates in. This is summarised in an evidence-based, numerical estimate of the quality of the business’s impact across the SDGs it influences.
​
Using the latest research, we assess what positive and negative impacts are being caused by the activity. We draw from hundreds of millions of research papers to establish this causal relationship.
​
We look at the magnitude of impact of each business activity on each SDG target in each country where they operate, and give them a score on a scale from -100 to 100:
Impact Pillars
To calculate the impact of each activity-SDG target-country combination we look at impact in four areas - what Vested Impact calls “pillars”. These four pillars are the foundation of Vested Impact’s algorithm. Looking at these scores can help businesses understand key avenues for strengthening their positive impacts and minimising negative ones.
Value: How directly are SDG targets being worsened or advanced? The value pillar looks at the types of activities the business is engaged in, regardless of scale, and assesses how directly and meaningfully they affect SDG targets in each country the business operates in, using a scale from -100 (greatly worsening progress) to 100 (greatly advancing it). It assumes that impact is higher the more an SDG target is being advanced, relative to other activities.
​
People: How in need are the people or environments being affected? The people pillar assesses the extent to which an activity is hindering or helping advance an SDG target for the people and environments that need it most, on a scale from 0 (least in need) to 100 (most in need). It assumes that impact is greater when it’s felt by those most in need relative to other people or environments.
​
Importance: How much do the SDG targets being influenced matter to people? The importance pillar uses surveys and other data to assess how important the SDG targets being affected by the business are to people. It assumes that a business has a greater impact when it addresses SDG targets that matter most to people, relative to other targets.
​
Effect: How much is the business driving change? The effect pillar assesses the scale of the activity’s impact and how much it can be assumed to be contributing to upward and downward trends in key economic, social, and environmental indicators. It assumes that impact is greater the larger the scale of the business, all else being equal.
These pillars are underpinned by 122 calculation points, and serve as the basis of the vested methodology. The scores are normalised and averaged to generate an "impact slice" score on a scale from -100 to 100 for each activity-SDG target-country combination.
​
Vested Impact score
​
We weight all "impact slices" by the relative revenue of the company on the activity, in the specific country. Then we calculate the sum of all negative score across all impact slices, and the sum of all positive score across all impact slices to then generate a net impact.
​
The overall Vested Impact score is calculated as:
(sum of negative impacts) + (sum of positive impacts)
​​
The Vested Impact Score is then normalised to produce a value between -100 to 100, which also corresponds to a D to AAA rating.
​
This Overall Vested Impact Score provides a useful measure of the quality of an asset’s impact – both positive and negative - across all its activities and all the SDG targets and countries it affects, on a scale from -100 to 100. This lets you compare across businesses, industries, geographies and time. The average scores are adjusted upward when companies influence more than one target positively. They are adjusted downwards when they affect more than one target negatively.
Want to learn more?
​
Download our full methodology here.
​​​​​Please note - we are currently updating our methodology documentation. Please check back soon to get the most up-to-date information!