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The latest global trends in social impact measurement, management
We are witnessing one of the most important trends in our lifetime called impact revolution. While this revolution may not be as big as a tech revolution, it has the potential to create a profound change. This revolution focuses on community and different impact ecosystem players. In 2019, major impact conferences such as GIIN Investors Conference in Amsterdam, SOCAP in San Francisco, GSG in Argentina, and Social Value International in Taiwan, are declaring that impact investing and impact measurement and management are two sides of coin. The success of impact investment depends on impact investors to take impact evidence seriously. How should asset owners, asset managers, and assets prepare for 2020? We will give you in-depth insight so that you can align your impact strategy.
We consistently heard two calls of action:
In 2019 global conversation solidified following points,
Capture fund's motivation(s) for engaging with the SDGs, determine its SDG impact intentions, and develop its theory of change. Start the process with impact statement or impact goals creation, which can help document precise SDG impact intentions and the Fund's impact goals. Also, document organization's impact measurement and management practices, standard business practices, governance, and controls.
The following short video is a brief primer to defining strategic intent and goal setting.
There is a common fallacy that an organization can take current programs and align with the best possible SDG Goal, SDG Target, and SDG Indicator. This approach has a risk of SDG washing. The real goal for aligning with SDG is to ensure that investors first prioritize based on the country mapping. Based on key priorities, the investor may choose theirs on impact thesis.
For example, let’s issues in Jordan or Mexico. Both countries have seen a significant influx of refugees. If we look at the ground level, different organizations typically play different roles concerning SDG alignment. To manage refugees, the role of the social enterprise in Jordan would be different from international development agencies or NGOs. While NGOs may be suitable for hunger as a short term relief, a social business may focus on job creation, economic development, health, and gender inequality.If you are an impact investor and not sure how to align with SDG, we highly recommend that you contact your nearest GSG NAB - National Advisory Board for further advice.
According to SDG Impact, "The UNDP Practice Standards are part of the SDG Impact initiative and the Impact Management Project. These practice standards provide practical guideposts that make it easier for the private sector to operationalize the SDGs and shorten the runway from an interest in the adoption of good impact practice. To recognize and encourage good practice, the UNDP Standards include a tiered certification framework to acknowledge and differentiate good practice in the market, with an SDG Impact Seal that would be awarded based on compliance with certification criteria."
SDG Impact practice standards for private equity are largely divided in three sections
We will take a deep dive into 8 points of impact measurement and management section and how closely it aligns to Impact Measurement and Management with Impact Cloud® along with training videos.
Stakeholder’s voice has been an important part of all the global conversations. Social Value International has that as their first principle, Impact Management Project highlights that as WHO and HOW MUCH, and SDG Impact has that as one of their impact strategy. You can use quantitative as well as an artificial intelligence-based approach to integrate stakeholder perspective throughout the investment lifecycle. Watch this video to see how you can manage stakeholder's voices in a program on Impact Cloud®.
Listen in-depth summary and step by step journey to Stakeholder Voice, Impact Management Project and SDG Impact certification below ( Listen Time: 22 Min )
Impact Management Project sometimes referred to as IMP, is a framework for building global consensus on how to measure, manage, and report impact. Since 2016, the IMP has brought together a practitioner community of over 2,000 organizations to establish norms and share best practices. The IMP also facilitates the IMP structured network, an unprecedented collaboration of standard-setting organizations that are coordinating efforts to provide complete guidelines for impact measurement and management.
Many leading standards like IRIS, GRI, SASB are starting to integrate Impact Management Project so that their users can use standards consistent with the Impact Management Project based on five dimensions of impact. What, Who, How Much, Contribution, and Risk. You can align your impact strategy to IMP dimensions or Theory of change in Impact Cloud. IRIS+ is another great starting point as it provides robust guidelines in selecting metrics. As you start building impact strategy as fund manager or an investee, having more than 4000 standards metrics built-in the platform such as Impact Cloud® simplifies the process. Many of them are aligned with different areas of impact, theory of change steps, SDG Goals/Targets, Impact Management Project dimensions.
Listen in-depth summary and step by step journey to Stakeholder Voice, Impact Management Project and SDG Impact certification below ( Listen Time: 19 Min )
In May 2019, GIIN released much awaited IRIS+ profile aligned with SDG Goals and Impact Themes. Wherever appropriate and feasible, the Fund is encouraged to select standardized metrics and include outcome measures or at least well-evidenced proxies, that is aligned with the SDGs and associated targets and shared in context aligned to five dimensions of impact from IMP. IRIS+ is a foundational core metrics for various impact themes or SDG Goals.
During GIIN Investors’ conference and SOCAP, we saw a clear call for action to start aligning toward IRIS+ profiles. While IRIS+ profile is a good start for the area where there is an alignment, often, many impact themes may not align with the Fund. In that situation, we highly recommend that you still use the IRIS+ profile as a reference guideline and create your profile. Impact Cloud helps you build impact strategy through drag and drop based impact strategy approach.
While many impact investors are new to the field, there is a major shocking reality. A lack of impact evidence often will end up with legal risk, financial risk, reputation risk or worst community risk. While there is a clear understanding of international development to allocate at least 5% of funding towards monitoring and evaluation, there is a strong call for action by leading practitioners to allocate 5 to 10 percent towards impact measurement and management.
Standards now give a complete guideline with practical thresholds for impact management, operationalize and implement industry frameworks and principles and inform and drive impact and financial performance.
Leading asset owners, asset managers, and assets have built a robust impact management strategy on SoPact’s Impact Cloud®. Now you can also start your impact journey with the most comprehensive and easy to use impact measurement and management process within a short time. Asset managers can now prepare for SDG certification through a comprehensive, flexible, and easy to use solution that aligns with your impact goals. With Impact Cloud®, you can save significant time and streamline the entire process from asset manager to asset level.
Learn More: Impact Measurement and Management
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This article was first published in next billion. Impact investors have long turned to the GIIN catalog of metrics (IRIS...Read full article