How innovative Fintech companies address this challenge
Companies large and small are feeling the pull from stakeholders to measure and communicate their impact. Investors, customers, employees, and communities are driving a wave of ESG focus for companies, one in which data and outcomes are the new currency. The field of Impact Measurement and Management is evolving quickly – as it must! Despite existing standards and emerging work being done through Global Impact Investing Network (GIIN), International Sustainability Standards Board (ISSB), the Science Based Target Initiative (SBTI), Taskforce on Climate-related Financial Disclosures (TCFD), and many others, there is not yet a GAAP-level adoption of accounting for a company’s progress against all of its social and environmental targets.
How can companies keep up? One option is to leverage the United Nations Sustainability Development Goals (SDGs) as a broad framework for impact measurement and management. More mature companies — such as Microsoft, Cisco, and Salesforce — communicate to varying degrees their impact against all of the SDGs.
For smaller or earlier stage companies, such alignment can be daunting. The SDGs are so broad and all encompassing; how can a smaller or newer organization speak to them all?
The SDGs are so broad and all encompassing; how can a smaller or newer organization speak to them all?
The good news is you don’t have to jump in feet first, commit to all 17 SDGs, or wait until your programs are fully mature. The SDG framework is broad enough to have resonance across industries, and to grow with your company. Yet, they are specific enough to be meaningful. Most importantly, they are straightforward enough to translate with your key stakeholders: customers, shareholders, employees, partners, and communities. Here are six steps to getting started with the SDGs.
1. Know your why
Before committing to the SDGs or any framework be clear about your intended impact, and center the needs of your key partners and stakeholders. Who are you trying to reach? How do they want to consume information? Beyond communication, is there an opportunity to use the framework to develop and inform your impact strategy and management?
2. Gather input
As human-centered designers, we believe the key insight can come from anywhere. Be sure to gather diverse sources and types of input. We have found the outside-in/inside-out approach to be helpful.
Inside out: Start with a self-assessment. This might include interviews or a workshop with key internal stakeholders such as social impact team members or other internal business partners like Environmental Health and Safety, Government Affairs, or Diversity, Equity, and Inclusion. It can also include reviewing the data that you already collect.
Outside in: Then validate your initial hypotheses by interviewing external experts or key partners who know your work. Desk research such as peer or partner audits are also helpful: What do your partners and peers focus on and what metrics do they track?
3. Map it out
It’s easy to get overwhelmed with the 17 SDGs and tangled up in their interconnections. We’ve found that visualizing your work in the context of SDGs helps identify which SDGs are most relevant to your team and organization.
We’ve found that visualizing your work in the context of SDGs helps identify which SDGs are most relevant to your team and organization.
Depending on where you sit in the company, this can start with a value chain map noting what parts of the value chain link to particular SDGs. For the Okta for Good team, we created a heatmap visualizing existing programs and partners’ work against the 17 SDGs. This allowed us to identify and quantify the clusters of SDGs where our work has been focused, and that we could authentically speak to.
The SDGs have indicator level metrics, but they are often measured at the country level. Thus, we have to identify which metrics are relevant for your particular organization and map them to relevant Goals. You can leverage an externally validated database like IRIS+ to browse and confirm which specific metrics align to a given Goal.
4. Know your audience
With whom and how will you be communicating your impact measurement? Will this go on your website? Impact report? Blogs? If you are going with a broad audience that includes community members and employees, you may want to provide additional context about what the SDGs are, and why and how your organization is adopting them. If it is a more specific audience (analysts, partners) that may be more familiar with the SDGs, you might want to emphasize the specific aligned metrics you will be reporting on and why. Again, this is not one size fits all, and you will have to make some judgments that work for you.
5. Start small
While it may not be reasonable for all companies to measure, report, or manage against all 17 SDGs, or even practice all 12 actions recommended in the SDG Impact Standards for Enterprises; companies of all sizes and shapes can begin to adopt specific Goals and actions as a way to track, communicate, and be accountable for their impact.
Consider emissions reporting — many companies began by measuring their Scope 1 emissions only. We now see companies measuring Scope 2 and even Scope 3 emissions. Over time, we have seen companies evolve from measuring to reporting to managing by these metrics. As your company matures, you can think of your impact measurement and management similarly.
Over time, we have seen companies evolve from measuring to reporting to managing by these metrics. As your company matures, you can think of your impact measurement and management similarly.
For Okta’s latest impact report, we opted to only report on those SDG that were directly attributable to either Okta’s contributions (i.e. Scope 1 impact) or our partners’ (i.e. Scope 2 impact). Moreover, for our first report, it was important that a) we not increase the reporting burden on our grantees, and b) that we make commitments within our remit as the Okta for Good team to realize. That’s why we are starting with the Goals and metrics that our partners were already tracking, or that our small team is readily able to track on our own.
6. Commit to continual improvement
The field of Impact Measurement and Management is rapidly evolving beyond legal reporting requirements. Each of us as practitioners has the opportunity to contribute to that evolution. Let’s not settle for cherry picking a few SDG’s and reporting only the feel-good metrics, but commit to continually re-evaluating the metrics we track, managing our performance against those metrics, and being mindful of and taking actions to mitigate any unintended negative impacts we might be creating along the way.
This is the process we followed. As part of our own commitment to continual improvement, we’d love to hear your feedback. What has worked in your organization? What challenges have you come across?
This essay is part of the “Why IM” thought leadership series — a set of perspectives and calls to action to mainstream the adoption of Impact Management. The series is an initiative of Impacting Together, a cross-sector network of practitioners aiming to break down silos across sectors and practice areas to share tools, solutions, and frameworks that can advance deep, durable impact. Previous articles in the series:
- Editor's Picks
- Impact Economy
- Impact Measurement & Management
- SDG 1 - No Poverty
- SDG 11 - Sustainable Cities and Communities
- SDG 12 - Responsible Consumption and Production
- SDG 13 - Climate Action
- SDG 16 - Peace, Justice, and Strong Institutions
- SDG 17 - Partnerships for the Goals
- SDG 3 - Good Health and Well-Being
- SDG 4 - Quality Education
- Stakeholder Capitalism
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February 9 - 12:00 PM EST
Founder, Boston Impact Initiative
March 30 - 12:00 PM EST
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