Current state of impact management
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 impact? How are you incorporating voices from stakeholders and beneficiaries to tell the true impact story? One of the biggest challenge facing private equity, corporate, impact investors, and other asset owners is how to build a portfolio that defines and generates true impact. There is an ongoing effort by Impact Management Project (IMP) aligned with TONIIC T-100 and OCED group to solve this challenge.
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 loosely coupled design that can flexibly exchange information with infinite scalability.
How can we scale with same principle in social sector? The time has come to apply a flexible approach that allows anyone to select and cross-link any standards like SDG, IRIS, GRI, and Custom Metrics for their asset/investment/grantee. At the heart of the problem, Impact Management Project (IMP) is defining what’s called Portfolio Impact Categories, Assessment, and overall Portfolio Analysis tool. This may be very important to asset owners, but let us take an extra step to move further and get in-depth feedback from each assets. How can we allow any asset owners or managers to map their internal and external data to analyze results based on five IMP dimensions?
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 section we describe challenges how to effectively use different standards and framework using Impact Cloud.
According to Impact Management Project - A Guide to Mapping the Impact of an Investment, "Asset owners are increasingly interested in the impact of their investments on society and the environment. Against this backdrop of growing interest from asset owners, asset managers are increasingly looking to assess and communicate the effects of investments on people and planet." For Asset owners there is no single linear impact management process; the process is iterative, with different entry points.