As one of the world’s largest promotional banks, KfW looks beyond the funds it provides. Rather, it is crucial to make the results and impacts it achieves transparent and measurable. KfW has therefore been establishing a uniform, Group-wide impact management system since 2020. “This is intended to ensure that the impact of the promoted and financed projects can be systematically recorded, assessed and managed,” explained Nina Zündorf, Impact Management Expert at KfW. This makes it visible how KfW contributes to the transformation of the economy and society through its financing.

Understanding impact, enabling development

The core of KfW’s impact management consists of measurable and comparable indicators that cover the three dimensions of sustainability – environmental, economic and social. They are based on the Sustainable Development Goals (SDGs) of the United Nations and on international standards.

Through a cross-divisional, uniform structure, these indicators create a consistent basis for making impact visible throughout the Group – despite different systems, different ways of working and different target groups. At the same time, this creates a valuable wealth of data that opens up new opportunities for analysis, learning and strategic development.

Impact management does not have any marketing-based goals. Its purpose is to derive reliable insights from data. “As KfW, this is how we want to learn and develop,” explained Nina Zündorf. The data obtained helps KfW’s business areas better understand their operations and make informed decisions.

Why transparency in impact management is crucial

As valuable as impact management is, its implementation is equally challenging. One reason for this is different perspectives on the topic of 'impact'. As a promotional bank, KfW, for example, clearly focuses on new business and annually determines the expected impact of the financing and promotions committed in the respective financial year – such as the planned power generation output through the financing of a wind farm. However, the actual impact achieved can often only be measured years later – for example, when the wind farm has been completed and is ready to be put into operation.

Different impact measurements are used depending on the approach, which increases the demand for comprehensible communication. "This complexity makes it so important for us to disclose how we proceed and which assumptions and data our results are based on. This is the only way to avoid misunderstandings in interpretation," said Nina Zündorf.

In order to embrace this transparency, KfW has established annual reporting with its Impact Insights.