Scottish National Investment Bank missions: consultation

5. Measuring Performance Against the Bank's Missions

71. The Bank will develop its approach to measuring performance. As set out in the Act, the Bank will measure and report on its financial and non-financial performance. In particular, the Act requires that the Bank use a balanced scorecard approach to support this. The balanced scorecard will capture the environmental, economic and social impact of the Bank's investments, as well as its financial performance. This will allow performance against the missions to be measured with the potential to develop innovative metrics for doing so. The missions are intended to be in place long enough for the Bank's activities to have a lasting impact.

72. The non-financial impact of the Bank's activity is expected to be measured with reference to:

• the NPF;
• the Inclusive Growth Outcomes Framework;
• the United Nations Sustainable Development Goals (UN-SDG); and,
• the United Nations Principles for Responsible Investment (UN-PRI).

73. Work is already underway to consider which of the 81 national indicators (used to measure performance against the national outcomes within the NPF) are most likely to be impacted on by the Bank's activity. Measuring the Bank's activity with reference to the NPF will need to allow for flexibility. It is not appropriate for the Bank to be measured against every national indicator given their inherently wide focus. Therefore, consideration is being given to how the national indicators can be used to determine the impact against both the Bank's portfolio as a whole, and against individual investments.

74. Performance is further expected to be measured with reference to the Inclusive Growth Outcomes Framework. The Bank will also consider the optimal method for applying globally accepted best practice of impact assessment such as UN-PRI and UN-SDG. Other impact assessments already undertaken throughout the public sector, such as those relating to equalities or island communities, are further expected to be used. These could be used at the point of decision making to assess the wide ranging potential impacts of investments.

75. The Act further requires the Government to appoint a person to undertake a review of the Bank's performance. This should happen at least every 5 years and performance will be measured in relation to the Bank's objects, missions, and national performance indicators as specified by Scottish Ministers. The report will be laid before Parliament and made publicly available.

76. Figure 3 below outlines the variety of impacts expected to be measured to demonstrate the Bank's performance.