About the Joint Impact Model
Measuring and reporting on impact in a consistent and comparable way is essential to evaluate progress towards global development needs and priorities, assess effectiveness of investments and drive impactful actions.
Prior to 2019, approaches to measure and report on the indirect impacts of investments has varied from one organisation to the next. Even though indirect impacts are fundamental to understanding the development effects of investments, measuring them is complex, and even more so for a full portfolio of investments. Several international finance institutions (IFIs) as well as the consultancy Steward Redqueen recognized this challenge and explored opportunities to align the IFIs approaches on indirect impact modelling. As a result, in January 2021 the IFIs launched the Joint Impact Model (JIM).
What is the Joint Impact Model?
Using input data such as revenue and power production from investment portfolios, the Joint Impact Model enables users to estimate financial flows through the economy and its resulting economic (value added), social (employment) and environmental (greenhouse gas emissions) impact. These impacts can be used to measure and report on the contribution of individual institutions to the Paris Agreement and the UN Sustainable Development Goals.
The JIM is characterised by its harmonised and transparent methodology and assumptions, public availability, collaborative nature, up-to-date macro-economic statistics, security features and user operated style.
Who is it for?
The intended users of the JIM are financial institutions with operation in emerging economies.
The JIM Foundation
In May 2022 the JIM foundation has been set as to establish credible oversight of the development of the JIM.
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There is a growing need for impact investors to contribute towards convergence around a globally accepted system for impact reporting. Harmonization will not only provide clarity on the impact the private sector is having on the SDGs in emerging markets, but also help unlock finance and mobilize action to the places that need it most. It will assist the just transition toward a climate-neutral economy and help address the socio-economic impact of the transition.
Furthermore, emerging economies face enormous pressure to reduce emissions while developing their economies. Unfortunately – with very few exceptions - the private sector is not sufficiently engaged in carbon accounting or signing up to net zero and they do not have the tools to do so.
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The JIM foundation aims to fill this gap through the Joint Impact Model (JIM). The JIM is a web-based tool which enables the reporting and assessment of systemic impact indicators such as jobs, contribution to GDP, and greenhouse gas emissions related to investments of financial institutions.
Established in May of 2022, the JIM Foundation manages the JIM and creates credible oversight for its development. Specifically, the JIM Foundation aims to help financial institutions to:
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Measure impact and gain credibility from investors as the JIM will continue to align to globally accepted standards and best practices including actors in emerging and developing markets.
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Reduce build and maintenance costs of impact reporting as indicators begin to align across institutions.
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Build strategic capacity on making impactful Investments. With the tool, clients can benchmark their performance by comparing their impact outputs across geographies and sectors, and by leveraging the tool insights to shape and make impact investing actionable