Yes, the Employment Pass notification letter does have an impact towards EP renewal. As mentioned, all employment pass related will be given an In-Principal Approval (IPA) letter once the application is approved, regardless it being a new or renewal application.
However, for a person to start working or continue working in Singapore, they will need to proceed and issue their employment pass.
Once issued, the Ministry of Manpower (MOM) will then issue a Notification Letter (NL) as proof that they can now start working or continue working in their position.
If no action was taken to issue the pass, then the In-Principal Approval (IPA) letter will be revoked, and the pass holder will need to be sent home or is unable to continue working in Singapore.