Introduction: As part of Reset Connect London 2024 and our participation at “From ESG and Sustainability to Impact: The Future of Finance” panel, we delved deeper into the concepts that our SVP, Commercial Development, Mahima Sukhdev discussed on her panel on the future of finance. In this interview, Mahima shares her expert insights on impact valuation, the importance of looking beyond carbon, and the integration of social and environmental data into investment strategies.

Q1: What is impact valuation?

Mahima Sukhdev: Impact valuation is simply speaking sustainability in the language of finance. When push comes to shove, the data your leadership will use to make decisions are financial metrics—the dollar values—because that’s what they are accustomed to. In the context of capitalism, that is what counts.

Impact valuation converts sustainability data into monetary values using peer-reviewed science and economics. This approach allows us to quantify impact into a consistent, comparable, and actionable financial metric, making it easier for decision-makers to understand what’s material, what to focus on, and to uncover risks and opportunities. It provides a rigorous, science-based, transparent alternative to the often subjective ESG ratings.

Q2: Why is it important to look beyond carbon?

Mahima Sukhdev:
It is crucial for investors to incorporate additional types of data, particularly nature-related data. The Kunming-Montreal Global Biodiversity Framework and the TNFD recommendations highlight the momentum from a regulatory perspective. Our planet’s biosphere integrity is critically compromised, with over $44 trillion of global GDP dependent on nature and its services.

At GIST Impact, we offer nature-related datasets grounded in peer-reviewed science, designed for seamless integration into investment strategies. It is imperative for investors to quickly adapt to using this data, as the earth will not wait for us to solve one problem at a time. Additionally, we cannot ignore the social aspects. Ensuring fair, respectful, and equitable treatment of employees and communities across the value chain is vital.

Q3: What are your thoughts on the evolution of ESG?

Mahima Sukhdev:
ESG has evolved from a framework for considering a company’s environmental, social, and governance performance into a product created by ratings agencies. While moving from shareholder to stakeholder capitalism is frequently discussed, implementing it in practice requires concrete steps and data-driven strategies. We must go beyond sound bites and create actionable pathways for businesses to follow.

Conclusion: Mahima’s insights underscore the importance of evolving our approach to sustainability and finance. By embracing monetized impact valuation and integrating diverse and innovative datasets, businesses can lead in this new era of finance. Stay tuned for more insights and updates as we continue to drive forward in sustainable finance and impact-driven investments – and in the meantime, check out our website for more information!