MICROFINANCE PAPER WRAP-UP: “The Impact Radar,” Published by UN Environment Programme Finance Initiative

The authors of this report offer a taxonomy to help measure the positive and negative impacts of the products and services of financial institutions, with the aim of enabling these institutions to build a better understanding of various elements of sustainable development. The “impact radar” includes a range of “impact areas” and constituent “impact topics” organized around what the authors deem “the three pillars of sustainable development:” social, socio-economic and environmental.

The social impact areas include equality of justice, livelihoods, and health & safety. Infrastructure and healthy economies are examples of the socio-economic impact areas, and the environmental impact areas include climate stability and the circularity of resources. For most of the 12 impact areas, the authors cite more specific impact topics – 23 within the social pillar, four under the socio-economic pillar and seven under the environmental pillar. The authors comment on the linkages among these topics – both positive and negative. Meanwhile human rights is an overarching element of all impact topics.

To implement the radar, the authors propose mapping exercises that address: (1) sector/impact; (2) asset/impact; and (3) needs and priorities. Multiple diagrams illustrate the taxonomy of the impact radar and map each impact area to the UN Sustainable Development Goals (SDGs). In addition, the paper links to various online tools for financial institutions seeking more assistance in analyzing the impacts of their portfolios.

This is a summary of a publication by the UN Environment Programme (UNEP) Finance Initiative, July 2022, 32 pages, available at https://www.unepfi.org/publications/unep-fi-impact-radar-2022/.

Additional Resources

UNEP homepage
https://www.unep.org

UNEP FI homepage
https://www.unepfi.org

SDGs homepage
https://sdgs.un.org

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