Step 2: Understand Impact when Rating

The Impaakt Team

7 min Read Time | November 25th 2022

Key Takeaways


Understand what an impact is.


Learn to see companies’ impact as part of a chain: the logic model approach, and look at the different dimensions of impact: the what, the how much, the who.


A company can impact society and the environment through its products & services, internal processes, and philanthropic activities.

How do you define “impact”?

A classic dictionary definition is:

​​Impact (noun /ˈimpӕkt/)
“Strong effect on someone or something”

... However, this is quite vague, large and intangible.

Let’s look at the meaning of impact in the context of measuring it.

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Frameworks to evaluate impact

Assessing impact can be a challenge. The good news is that many frameworks exist to guide you as an Impact Rater to conduct an objective and rigorous evaluation of companies' impacts.

We took the best of these methodologies and applied them to our model.

In this article, you'll find a condensed version of what you need to know to be able to analyse impact.

1. The Logic Model

To look past greenwashing or company bashing, it is essential to break down a company's impact into smaller components part of a causal chain.

This model is called the logic model, and it looks like this:

At Impaakt, we only focus on the outputs, outcomes, and impact of companies’ actions, which are tangible effects, as opposed to their intentions, inputs, or activities.

Still not sure you understand this approach? The example below will help you understand the difference between intention, input, output, outcome, and impact.

  • Intention: The company is committed to improving the livelihoods of four million farmers.

  • Input: The company created an internet-based intervention that gives farmers access to information about soil and seed quality, prices, and weather.

  • Output: The internet-based services reach out to more than four million farmers growing a range of crops in over 40,000 villages across eight states.

  • Outcome: Four million farmers have benefited from an average of 2.5% higher prices than the traditional market for agri-products.

  • Impact: Thanks to the internet-based intervention that was implemented, after one year, the farmers are able to tackle challenges posed by unique agricultural features, such as fragmented farms, weak infrastructure, and the involvement of numerous intermediaries.

This example was taken from this analysis.

When rating, make sure you have this model in mind and rate the actual impact of companies, not their intentions (as good as they may be).

2. The IMP Model

To help you assess impact, you can follow the Impact Management Project model (IMP) and, in particular, its first 3 dimensions.

To do so, you will need to answer key questions about the impact described.

The first three questions (what, how much, who) will help you establish the issue at hand.


Questions to ask yourself

What outcome(s) does the effect relate to, and how important are they to the people or the planet experiencing it?


1. Consumers who got food poisoning

2. Farmers’ incomes

How much?

Questions to ask yourself

How significant is the effect that occurs? Over which time period?

Make sure the impact is of significant scale. Read more about it in our Golden Rule article on granularity.


1. Six factual contaminations between 2019-2020

2. 60,350 farmers since 2009


Questions to ask yourself

Who experiences the effect and how underserved are they in relation to the outcome(s)?


1. Potentially 54 million customers in the US, Europe, and Indonesia

2. Farmers from rural areas of Ghana spread across 1,644 communities

3. Companies’ Products vs Processes vs Philanthropy

You should think about the following ways a company can impact the planet and society:

  • Through its products and services (for example, vaccines or internet access) and its influence on society (for example, disruptive technology or market transformation).

  • Through its processes and practices (for example, industrial pollution or job creation).

  • Through its philanthropic or CSR activities (for example, education initiatives or water conservation projects).


Based on the article you've just read, here are some more we think you'd be interested in.

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Step 3: Learn How to Assess Impact

Learn how to rate the environmental and social impact of companies.

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Steps to get started as an Impact Rater

Pass your Rater certification by following these 5 simple steps.

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Step 4: Consider the Golden Rules when Rating

Keep in mind our basic Golden Rules when assessing the impact of companies.

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Step 5: Go Beyond Rating

Learn about the report function and companies' advance reports.

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Step 1: Find out why Rating is Important

Learn about why you should rate companies' impact.

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