Did you know that 62% of companies mentioned the SDGs in their reporting, 37% of companies selected priority SDGs, 79% of companies that prioritized the SDGs chose SDG 13 Climate Action, 28% of companies set quantitative targets and linked these to societal impact? (Source: SDG Reporting Challenge 2017) In other words, many companies are starting to align with UN SDG Goals, but are they moving beyond simple impact washing? While there are multiple impact frameworks, standards, and tools available today, most organizations are still struggling to understand and communicate their impact.
Millennials are much more impact savvy than previous generations. They are asking hard questions beyond the simple composition of portfolios. How are you creating an
Looking back, in 1994, when I worked at TIBCO/Reuters where we championed and revolutionized software integration based on publish/subscribe which is now ubiquitous and fundamental to any corporate application's integration. Back then our premise was - create a software bus (similar to Intel’s Hardware Bus). This allowed us to create
How can we scale with
Last three years we have been experimenting and collecting feedback from hundreds of social sector companies, working with multiple standard bodies, and bringing in our experience to solve the challenge of building flexible integration for the entire impact ecosystem.
SoPact Impact Cloud simplifies all the impact jargon using simple impact search engine aligning Theory of Change (TOC) and Impact Management Project (IMP). Simplify metrics selection aligned with Sustainable Development Goals, IRIS, GRI, and build custom metrics based on your internal goals, and targets. Drive a lifecycle of impact framework, progress monitoring, and reporting with individuality and flexibility.
In Uniting the Impact Ecosystem: A Call for End-to-End Impact Management, we introduce impact ecosystems players. Three key layers are Asset Owners, Asset Managers, and Assets.
In the following
Impact Management Project
Impact Management project defines five dimensions of the impact for the each of its effect on people or planet: intended and unintended, positive and negative. For each effect, level of performance is evaluated for all five dimension
The real challenge is that that investor should use a data-driven approach to assess the impact. This is where impact cloud provides a flexible foundation of cross-reference services that allows the evaluator to assess results based on both external and internal data.
Figure: Working Example from Impact Management Project: Evaluation process for each effect based on a data-driven process.
Integrating Investor’s Impact Matrix
As investors gather better asset-based evaluation a next task is to map their existing portfolio and then, over time, a transition that portfolio to be impactful in the way that best suits their intentions and constraints.
The ultimate goal is to define a portfolio that maps all the assets that help communicate two most important questions:
- Impact allocation for a portfolio that not only communicates composition by instruments and sector composition but also defines impact metrics of a portfolio. This impact metrics can help cleary communicate real footprint. For example, €220 billion portfolios of the pension fund may achieve much lower impact which avoids harm compared the $10M portfolio of a family foundation that is focused on creating
solution . As an investor seeking for higher impact might want to review impact metrics before investing. - Impact investors are now asking to provide an evidence of how their capital creates an impact or how beneficiaries are benefiting from the stated impact? This has been often a challenging subject as often
outcome of impact investors are not aligned with investee. Often they do not speak the same language of an outcome, and often do not trust results/data collected from investee. Creating impact data pipeline from enterprise to asset owners through Impact ID describes how we can solve outcome alignment and data trust issues between asset owners, asset managersand assets.
Integrating Social Impact Frameworks & Standards
During the last ten year, we have seen a rise in leading frameworks from the theory of change, impact management project. We have also seen a lot of standards starting with Sustainable Development Goals (SDG) and IRIS/GRI etc. While these standards and framework are a good starting point, they are not sufficient to truly understand the impact of assets. There are other initiatives from the UN, OECD, and TONIIC to build an integrated framework. For example, TONIIC’s T-100 provides a cross-linking between Impact Management, SDG, and IRIS.
While these are definition is useful, they still have few limitations --
- Requires more flexibility to accommodate other qualitative/quantitative custom and standards-based metrics
- Requires a foundation metrics search, selection, data collection, analytics, and reports
Unfortunately, many investors use this reference but they have to streamline the process on their own. SoPact Impact Cloud provides a theory of change (TOC) & impact management (IMP) project driven
Integrating Theory of Change
Impact Cloud integrates SDG, IRIS & Impact Management framework defined by OCED, IRIS, and TONIIC. In fact, we take a step forward, by integrating a flexible metrics catalog that not only provides enriched metadata at the metrics level but also cross-link SDG goals, targets and indicators with GRI and IRIS. On top of that, each of the SDG targets can create a hybrid standard and custom metrics allowing each asset to define impact (and context) metrics. This theory of change based approach allows asset managers and the
Conclusion
The key to the success of impact measurement & management is that the process aligned with
Most Asset Managers today still aggregate results from the assets in excel based manual process. They often have a pseudo impact data aggregation framework, which requires investee or grantee to provide a data on a regular basis. Many even use B-Labs based B-Assessment approach. While they provide IRIS based framework to aggregate results most feel that this approach is too limited.
B-Assessment based approach might be useful to few especially GIIRS rating, most investees think that this approach does not convey necessary context. Second, the questions presented in the form for IBM Rating, pigeon holes to a rigid approach. Finally social and
The best data aggregation
- Allows asset managers to define metrics specific to the context that is unique to each enterprise (asset).
- Allows enterprise and asset
managers to measure progress against their own unique targets. - Performs
simplified analysis of assets with similar or different metrics. - The results from different assets and asset managers can be nicely composed in a unified way, reducing tremendous data aggregation and reporting burden.
Impact Cloud reporting provides built-in widgets that beautifully provides an integrated theory of change, impact management reporting combined with portfolio or fund level automatic reporting. The story-driven wizards allow dynamic table, charts combined with integrated impact learning and narratives from social media feeds.
Impact measurement to management enables funders to make better decisions based on a reliable and effective process.
Further Reading
Curious about what other setting up actionable impact management framework? Get a free copy of this e-book with 4 impact measurement experts.
