Webinar Joint Impact Model (JIM) 27 November, Den Haag
Agenda Intro 1 About the Model 2 Key Features and Methodology 3 Practical Implementation 4 Next Steps 5 Q+A 6 2
Joint Impact Model (JIM) – About the Model 27 November, London
Why model indirect impacts? Dire rect ct impact mpact is only a f fracti ction n of the tot otal al impact mpact of a p projec ect Observi ving ng indirect direct impact t is challen enging ng and often n not ot practi ctica call lly feasibl sible Consist sistent nt and effici cient nt appr proach ch to assessing essing indire direct ct impact mpact 4
Why join together? Incre reased sed demand nd for trans nspa pare rency ncy and harmoni nisati sation Growing number r of users, , all with h differe rent nt appr proache ches Enables es opportuni tuniti ties es for collabora rati tion n and shared red learni ning ng Creates es opportuni tunity ty for ot other r users to assess ess their indirec direct t impact mpact 5
Our approach to JIM 4 OPEN P ROGRESSIVE HARMONISATION ACCES S 3 HARMONISED INPUT DATA HARMONISED 2 MODEL / PLATFORM HARMONISED 1 METHODOLOGY / ANALYTICAL FRAMEWORK Group oup obje jectiv tive: • Develop lop a single le model odel by harmon monisi ising met ethod hodology logy, , model odel and d input data. ta. • Aligned ed approa oach for our instit itutio ions s to calc lcula late e and repor ort indir irect impa mpact. t. • Make it publicly icly ava vaila ilable ble for a wide der group oup of user ers. • Contin tinue e to wo work across ss institu itution tions s and d exper erts s to further her refine ine and alig ign the mode del l espec ecial ially ly for Jobs obs and d GHG emiss ssio ions, s, wher ere there is ongoi oing wo work . 6
Key features of model An Inp nput ut-Outp Output ut (I-O) model Models s fina nanci ncial flows s of project(s) ct(s) through ugh an economy These se fina nanci ncial flows s can be t trans nslat ated d into o ot other er appropri opriat ate impact mpacts Curre rrently ntly incl cludes: udes: Final adjustments Value added Emp mploym yment nt GHG emiss ssions ns 7
Joint Impact Model (JIM) – Key Features and Methodology 27 November, Den Haag
Agenda Key features 1 Interface 2 Methodology 3 9
What is the JIM? Reveals indirect impacts 1 Harmonised approach 2 3 Transparent 4 Combines best-practices 5 Open access 10
What insights does the JIM provide? VALU LUE E ADDED DED EMPL PLOYMEN ENT GHG G EMISSIO ISSIONS NS CO 2 emissions • • Salaries • Jobs for women • Non-CO 2 emissions • Taxes • Jobs for youth • Profits 11
What is the scope of these insights? Suppliers’ suppliers Suppliers Investee Customers Sourcing goods & Sourcing goods & Providing goods & services services services SUPPL PLY Y CHAIN AIN IMPA PACT CT DIRECT RECT IMPA PACT CT ENAB ABLIN LING IMPACT ACT Power & finance only Re-spending salaries Re-spending salaries INDU NDUCE CED D IMPA PACT CT Impact for which observed data is often available Additional impacts that are modelled 12
Agenda Key features 1 Interface 2 Methodology 3 13
How does the JIM work? Input Model Results template calculations visualisations 14
Input template example A full list of inputs and definitions will be published on www.jointimpactmodel.com 15
Results visualisation example Job impact mpact 16
Agenda Key features 1 Interface 2 Methodology 3 17
How does the JIM quantify results? Government spending Private consumption Mining & Quarrying Food processing Manufacturing Investments Agriculture From Transport Output To Export Trade CONSUMPTIO PTION N & EXPORTS ... of company outputs lead to Agriculture Mining & Quarrying INTERMED ERMEDIA IARY Y CONSU SUMP MPTION ION Manufacturing DEMA MAND & EXPORTS TRANSF SFER ERS Food processing … of money between sectors leading to Trade Transport Salaries Taxes GDP GDP V ALUE A DDED Profits/savings Imports VALUE E ADDED ED EMPLOYMEN MENT GHG EMISS SSIONS IONS Output Employment GHG emissions 18
How does the JIM quantify results? Manuf Government spending nufactur Private consumption Mining & Quarrying Food cture Manufacturing od proc Investments e of plastics Agriculture From Transport oces essing Output To Export CONSUMPTIO PTION N & EXPORTS Trade ing ics of company outputs lead to Agriculture 10% Mining & Quarrying 0% Manufacturing 5% TRANSF SFER ERS Food od proc oces essing ing 0% of money between sectors leading to Manuf nufactur cture e of plastics ics 20% 20% Trade 10% Transport 10% Salaries 10% Taxes 10% Profits/savings 5% Imports 20% VALUE E ADDED ED EMPLOYMEN MENT GHG EMISS SSIONS IONS Output 100% Employment GHG emissions 19
How does the JIM quantify results? Manuf Government spending nufactur Private consumption Mining & Quarrying Food cture Manufacturing od proc Investments e of plastics Agriculture From Transport oces essing Output To Export CONSUMPTIO PTION N & EXPORTS Trade ing ics of company outputs lead to Agriculture 0% Mining & Quarrying 0% Manufacturing 15% TRANSF SFER ERS Food od proc oces essing ing 0% of money between sectors leading to Manuf nufactur cture e of plastics ics 0% Trade 5% Transport 10% Salaries 10% Taxes 5% Profits/savings 5% Imports 50% VALUE E ADDED ED EMPLOYMEN MENT GHG EMISS SSIONS IONS Output 100% Employment GHG emissions 20
What data sources does the JIM use? Social al Ac Accounti nting ng Matri rices ces and GHG data for 121 countries and 65 sectors worldwide; Emp mploym yment nt data for 189 countries and 14 sectors worldwide; Various us indica dicator ors including GDP growth, private sector capital formation, electricity consumption for 217 countries worldwide; 21
Why an Input-Output methodology? More complete impact insights Applicable to full portfolio Low data burden Explanatory value 22
What are key limitations? Methodological constraints Data source limitations Neglecting unique features of investments Dependency on revenue data Local impact only 23
The JIM Organisations have a need for quantifying indirect impact mpact 1 We developed a model that enables organisations to obtain these insights 2 It is a joint nt process for continuous improvement: the more parties contribute, the 3 better the model becomes 24
Joint Impact Model (JIM) - Practical application 27 November, Paris
From individual institutions approaches… PROPAR ARCO CO CDC FMO Estimate job and value Estimate job supported • • • Estimate jobs supported added by country and by by CDC’s portfolio to by FMO’s projects RNE technology based on better understand Provide a methodology • PROPARCO’s portfolio employment impact O BJECTIVES that could be easily • Propose an assessment • Provide a methodology applied all investments methodology that could that could be easily be easily replicated applied to entire portfolio Project level New commitments level • • • Portfolio level A PPLICABILITY • Ex ante assessment • Ex ante assessment of • Monitoring during due diligence new investment • Strategy learning & • Investment decision decision making • Reporting C URRENT USE Reporting Monitoring • • • Reporting 26
Examples of Power enabling impact 110 MW Wind project UKRA RAINE INE TOTAL: L: 618 jobs bs Total investment: 175 MEUR with a 25 MEUR Operating impacts (20) Construction impacts (116) Proparco loan Second order growth impacts (481) 25 years of operation Value lue Ad Adde ded 8 MEUR UR Agriculture (0.9) Total Construction expenditures: 147 MEUR Manufacturing (3.4) (35% locally procured) Other industries (1.5) Services (2.7) Total Operation expenditures: 28.7 MEUR 50,4 MW Wind project KENY ENYA TOTAL: L: 15,106 jobs bs Total investment: 127.2 MEUR with a 23.8 Operating impacts (2,543) Construction impacts (135) MEUR Proparco loan Second order growth impacts (12,429) 20 years of operation Value lue Ad Adde ded 45 MEUR UR Total Construction expenditures: 64.4 MEUR Agriculture (3.6) Manufacturing (7.8) (15% locally procured) Other industries (11.1) Services (22.8) Total Operation expenditures: 62.8 MEUR 27
…to The Joint Impact Model > All sectors and different pathways to output S COPE > Backward effects and developing forward effects 1. Portfolio monitoring level A PPLICABILITY 2. Confidence levels provided depending on: Granularity of input data (from must have to nice to have) • Underlying multipliers (from modelled to case study estimates) • 1. Joint reporting (careful when confidence levels are too different) F UTURE USE 2. Joint learning & develop collective understanding of our impact 3. Improve strategic decision Facilitate reporting for common client, Increase comparability of activities, Improve collectively. 28
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