Our mission at the Impact Investing Institute is to accelerate the growth and improve the effectiveness of the impact investing market, so that more capital contributes to achieving the UN’s Sustainable Development Goals and the well-being of people and the planet.

Reporting is a key pillar of this mission. We believe that organisations should measure, manage and report their positive and negative, intended and unintended outcomes which impact on people, planet, and the economy. This is critical both to the organisation’s business strategy and also wider public interest, and it enables stakeholders to hold boards, asset owners and their investment managers accountable.

We therefore welcome the opportunity to respond to the European Commission’s consultation on the review of the Non-Financial Reporting Directive. Traditionally, non-financial reporting has focused on how an organisation avoids harm, mitigates risk and manages its reputation. The disclosures are within an organisation’s control and can be captured from ‘inside’ the reporting organisation (internal focus). They are important for the immediate stakeholders of the organisation, but they generally do not measure or report the impacts, on the planet or people, resulting from the organisation’s activities.

Impact reporting, on the other hand, strives to directly measure positive or negative changes to planet or people resulting from an organisation’s activities. This necessarily has an ‘external’ focus, with impacts captured ’outside’ the reporting organisation. Impact reporting focuses on how organisations can make a positive contribution to the societal and environmental challenges the world faces.

We support the global convergence and increased adoption of high-quality standards for measurement, management and reporting of environmental and social outcomes. You can find our full response here.