Impact Measurement for
Ventures
Before We Begin
Why should I manage and measure impact?
What are the benefits of Impact management?
What to ask before I start?
First, Determine Your Level of Impact
The first stage in creating an impact strategy is using the ABC framework to identify the level of Impact you are pursuing.
ACT TO AVOID HARM
ACT TO AVOID HARM
At a minimum, enterprises can Act to avoid harm by identifying where the enterprise is causing harm to people’s well-being or the condition of the natural environment and act to minimize or eliminate that harm
Example:
A clothing enterprise paid employees below minimum wage. Its operations were inefficient and carbon intensive versus peers. Two years ago, the enterprise made a commitment to clean up its act. Since then, the enterprise has reported meaningful increases in workforce salary. It has also set targets to reduce its carbon emissions by 70% until 2030.
BENEFIT STAKEHOLDERS
BENEFIT
STAKEHOLDERS
In addition to acting to avoid harm, enterprises can actively benefit stakeholders by improving well-being for one or more group of people and/or the condition of the natural environment
Example:
A carpet manufacturer that produces carpet tiles through use of environmentally friendly materials and production methods. Through various initiatives, the entreprise has achieved net-zero carbon emissions across its operations. It is celebrated as a leading employer in terms of workforce diversity and well-being, setting a target of 50:50 gender ratio in all levels of management, by 2025.
CONTRIBUTE TO SOLUTION
CONTRIBUTE
TO SOLUTION
In addition to A and B, level C requires that the enterprise product or service directly addresses a global challenge and positively contributes to people's well-being or the natural environment
Example:
A marine biologist troubled by the degradation of coastal reef established a biotech entreprise that develops new types of plastic consuming algae to reduce amount of free floating plastic by 75% within 10 years.
Second, Choose Your Measurement Framework
If your product or service has a direct positive impact and addresses a social or environmental problem (Level C), you should have both an ESG and an IMM strategy. If your product is rather neutral but benefits stakeholders (Level B), or if your product is controversial (Level A), you should start with an ESG strategy.
