This publication explores the critical role of Impact Measurement and Management (IMM) in ethical finance, providing ethical finance providers with the tools and strategies to effectively evaluate and communicate the positive social and environmental impacts of their work.
Based on a series of FEBEA-organised workshops, the paper emphasises the importance of translating broad organisational missions into actionable impact theses using a structured Theory of Change (ToC).
By creating a clear problem statement and identifying specific impact indicators, ethical finance providers can establish a roadmap that allows them to quantify, track, and report on the social outcomes they aim to achieve. This step-by-step approach enables organisations to align closely with their values, mitigate mission drift, and improve operational effectiveness through data-driven insights. Additionally, the publication advocates for a robust process to track greenhouse gas (GHG) emissions, helping ethical finance providers respond to increasing regulatory pressures and meet global sustainability standards, such as the Corporate Sustainability Reporting Directive (CSRD).
The publication offers practical guidance for implementing IMM, including methods for selecting qualitative and quantitative indicators and data collection strategies tailored to limited resources. It underscores the value of standardised metrics like those from the Impact Reporting and Investment Standards (IRIS) and tools like the Greenhouse Gas Protocol and Partnership for Carbon Accounting Financials (PCAF).
These frameworks provide ethical finance providers with a reliable foundation for assessing their direct and indirect emissions, supporting a transition toward low-carbon operations. Finally, the paper outlines next steps for the sector, suggesting integration of advanced technologies, stakeholder engagement, capacity building, and policy advocacy to further enhance IMM practices. By refining these practices, ethical finance providers can deepen their impact, communicate successes transparently, and maintain accountability while promoting sustainable finance models across Europe.
About FEBEA:
The European Federation of Ethical and Alternative Banks and Financiers (FEBEA) is an organisation dedicated to supporting ethical finance institutions in Europe. FEBEA gathers 34 financial organisations from 17 different countries across Europe. The network advocates for and facilitates sustainable financing options that prioritise social and environmental impact, transparency, and democracy. Through its network, FEBEA connects members with EU funding opportunities and offers resources, training, and consultation to help navigate complex funding landscapes, especially within programs like ESF+ and InvestEU.
Link to FEBEA’s website: www.febea.org
Source: Impact Measurement and Management – European Commission
