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Can We Democratize Better Impact Management?

More enterprise managers and investors are pointing to the UN’s Sustainable Development Goals as their guideposts for the good they want to do in the world. And sustainable investing assets now account for $17 trillion, or about 33% of all professionally managed assets in the US. Globally, the figure is likely to be an even higher percentage, given the longer history of sustainable investing in Europe.

But it’s also clear that there’s a big gap between the walk and the talk. There’s no one concrete definition for what a “sustainable” investing strategy entails. Environmental, Social and Governance, or ESG, reporting, the most popular term globally for screening and reporting on the stakeholder risks that companies manage, is so diverse that several recently published academic papers show similar companies earning radically different ratings.

There’s no one concrete definition for what a “sustainable” investing strategy entails.

If you’re judging actual impact on the SDGs, the data is even weaker. PWC reports that in 2019 72% of companies mentioned the SDGs in their reporting. But only 14% mentioned specific targets, and only 1% reported quantitative measures to show their progress. Would you trust a financial report that included goals but no performance measures?

SDG 4 Quality EducationWe’ve just spent two years working with investors and enterprises around the world to understand how they are doing the work of measuring and managing impact, across the spectrum of ESG, SDG, and other impact approaches. And at the same time, we compared them to emerging standards of practice, most notably the new UN SDG Impact Standards, created by the United Nations Development Programme (UNDP). We saw that while there are some fabulous practices emerging, there were very real, teachable gaps between what most companies and investors are doing now, and what they are being asked to do by emerging standards and regulations. How long would it take for them to catch up?

When you’re working with an agency like the UNDP that has deliberate global goals to meet in nine years, and an expanding fiscal gap needed to do it, the timing of the private sector learning curve was suddenly more relevant than ever. In conversations with the UNDP, the Impact Management Project, and others, we asked 3 bigger questions:

Cathy Clark Discusses Her Involvement in the Development of the SDG Impact Standards    Watch the Full Program

1. What could we do to improve impact management for all enterprises and investors interested in ESG, SDGs, or other impacts? How could we make the emerging practices easier, faster, and more accessible? Most of the concepts and practices in impact management are boring, nerdy, and full of off-putting acronyms (ESG, SDG, GRI, PRI, IMP…). In 2019, a global group was teaching key concepts in small gatherings and it was taking 3 months’ lead time to schedule the events, even with a great deal of demand. We asked, can we put it online? Can we make it easy and globally available at the same time?

2. Could we help standardize impact management practices? This is tricker. What the world has a lot of now are standards for reporting on impact. This comes from the “disclosure” mindset of risk. You disclose things that are material risks to the company’s shareholders. But the new standards of impact management are broader than this, in part because to make actual progress on an SDG, like clean water or universal health coverage, you need to do a lot more than just report on the most salient risks to the bottom line of the company. You need to build in a culture of managing the material impacts you have on the stakeholders you affect. How could we help enterprises and investors share a common understanding of their complementary roles in managing impacts on all stakeholders? How could we bring practitioners into the spirit and flavor of the new emerging standards in ways that would give them confidence that, while they may already be managing impact in some ways, they can, with simple actions, do it much better?

3. Last, could we start to require impact management training as a precursor to hiring in this field? What differentiates impact investing from regular investing? Or ESG management from regular management? I think it’s all about cultivating good practices of impact management. It’s naming your intentions, integrating them into what you do, working to optimize them actively, and reinforcing those commitments within your governance structures. If we did this right, knowing this process is something you could require your job applicants to have done before they start, as a new credential.

Will we end up democratizing impact management? That depends on many things, but most of all it depends on practitioners like you.

SDG Classroom

Those were our questions and Duke’s relationship with Coursera became our answer. By using a MOOC platform, our training would be instantly accessible around the world and could handle tens of thousands of learners at once. Coursera’s platform is video-based, so we could make small, practitioner-friendly videos and reuse them in other teaching situations afterwards, even sharing them with other teachers globally. And while all individual courses are free, Coursera allows learners to pay a small fee to earn a certificate of completion and post it on their LinkedIn page.

The course, called Impact Measurement and Management for the SDGs, went live on September 13, 2021. As of this writing, September 16, just three days later, over 820 people had already enrolled to learn how to improve their own impact measurement and management practices. It usually takes me about six years to reach that many people teaching in person at Duke. And it shows how hungry professionals are to learn to do impact measurement and management better.

Will we end up democratizing impact management? That depends on many things, but most of all it depends on practitioners like you. We hope that if you manage an enterprise or an investment portfolio, and care about impact on people and planet, you’ll log in and take a look at our training. It’s only 10 hours. Would you bet on the future of sustainability on the planet in 10 hours of your time? We hope you might!

Named Social Innovation Thought Leader of the Year in 2020 by the Schwab Foundation and World Economic Forum, Cathy Clark serves as Faculty Director at the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University’s Fuqua School of Business.

This article was produced in collaboration with the Magazine's Content Partners.

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