I attended a very interesting closed-door roundtable this week – hosted by the startup-savvy Metta team in Hong Kong. The topic was both challenging and difficult to develop: how to turn the Sustainable Development Goals (promoted by the UN) into practical and measurable Impact?
As a quick reminder, the UN Sustainable Development Goals (SDGs) were launched in 2015 to try and solve some of the most pressing issues on Earth. The point by then was to create a general dynamic, of course, but the initiative also had the merits of providing practical directions for governments, businesses, social enterprises and NGOs to focus on and invest in. For instance, goal number one relates to ending poverty, two deals with zero hunger, three is health, fourth is education, so forth and so on.
The question which was discussed at the Metta Roundtable was both simple and ambitious: how do we make these goals more than just goals, and how do we turn them into a reality of some sort?
Unsurprisingly, the question led to more questions (and insights). For instance, how do we make sure that business actually pays attention and gets involved, so that ultimately social Impact isn’t just a matter of governments doing the work. At the same time, how do we make sure that what the business does is effectively a matter of making an Impact and not just a matter of greenwashing (or Impact-washing).
Sustainable Development Goals vs Impact benchmarking.
The participants to the roundtable came from various backgrounds – large multinational corporations, NGO, financial firms, academia (me, in fact), you name it. Despite such variety, nonetheless, the topic which naturally came up first was benchmarking and the ability to measure sustainability, whether from an Impact or progress perspective.
For NGOs, benchmarking the progress made on the Sustainable Development Goals turned out to be very different. One participant, in particular, mentioned a rather simple questionnaire which helps to know what people need and whether the work fulfills that need in the long-run. In that case, the benchmarking thus takes place on a small – individual or group – basis because small scale is the best way to collect data and make the assessment both objective and sharp.
For a large multinational group, however, benchmarking progress was a rather daunting task, with an operating model based on sustainability and CSR documents written to fulfill an increasingly demanding need. This is not to say that the group at stake wasn’t into building sustainability. This is to say that – at their scale – the idea of being sustainable is easier said than done and Impact Thinking tends to be a matter of looking at what subsidiaries are good at doing.
The issue of defining Impact and sustainability.
Next came the issue of defining what Impact and being sustainable means. Again, differences appeared depending on the nature of the organization and the scale of their activities.
What is the purpose of Impact and sustainability?
For an NGO, Impact is about making a difference, now and in the future, to change things and move from bad to better, in a sustainable way. There, sustainable means that the operating model will be able to persist in the long-term.
For a large group, Impact is rather about creating a more sustainable operating model and reducing the negative aspects of the existing processes.
Interestingly, some participants discussed in great length the idea that Impact was easily environmental but more complex to apprehend from a social perspective – if only because there are no agreed standards relevant to social Impact valuation.
Interestingly – again – another point was made as to the relevance or irrelevance of Impact for certain publics. Whilst large groups see Impact Thinking as a matter of aligning their operations with best (or better) practices, the point was made that in the finance world, investors rarely ask about sustainable models and never ask about the 17 Sustainable Development Goals. That’s to the exclusion of Impact investors, obviously, but the big picture is still there.
The problem of Impact (and Impactful) communication.
The topic of communication also came up as being sensitive.
On the one hand, sustainability efforts are largely made public through Corporate Social Responsiblity (CSR) reports which highlight signs of progress and results. On the other hand, these efforts are also mostly made public through these reports, which means that communication is limited.
In the same way that I have done a lot of work pushing professors to turn their research publications into real-world results and change, the work produced to build a CSR document ought to be disseminated beyond that document. Failing which, change is merely a reporting thing, and ultimately whether it really happens or not doesn’t make much of a difference.
The role of Impact strategy-building.
For most participants, ultimately, the message ended-up being that benchmarking performance is overall very difficult. Not to say “virtually impossible”.
In many cases, the best way to actually measure Impact is not to make an actual Impact but to design and develop default strategies and protocols meant to highlight positive evolutions – whether they are expected or not – depending on the various expectations and KPIs which flow from the various policy initiatives out there.
Issue: sustainability KPIs and Impact targets aren’t the same.
There is a major difference, however, between blue sky box-ticking expectations, KPIs and Impact.
While KPIs and tick-boxes are used to show that groups and entities of all sorts have done things the best they could in line with industry or international standards, a secondary message emerged that what really matters is whether we set up some clear Impact goals from the beginning. Without a clear Impact project, KPIs become meaningless indicators which become risky from a greenwashing perspective.
For instance? Well, in a city like Hong Kong the amount of plastic containers which ends up in the landfill is both massive and scary. So people have developed various KPIs to try and measure the efforts made towards reducing pollution. Yet the discussion led to the idea that one fundamental question was missing from the equation. What Impact do we really (yes, really) want to achieve?
Do we want to increase the amount of plastic that is being recycled? That option A. Or would we rather promote a model in which plastic bottles are not used anymore? That’s option B. Or do we want to develop a viable economic system in which plastic is produced to then be recycled as part of a supply and re-supply loop type of supply chain?
Of course, in both cases the purpose is to reduce pollution and counting the number of recycled bottles helps to highlight a reduction of waste. What we have there, however, is a performance indicator more than an Impact indicator. The real question, ultimately, ought to be this one: what is the real Impact we want to achieve?
Said differently, defining an Impact goal creates a whole new opportunity to change the world. Having an Impact frame means that there is an agenda people can relate to and refer to, which in turns helps to build meaningful KPIs (which I actually call Key Impact Indicators) and, perhaps even more importantly, a common language which can then be shared with like-minded actors and future partners. This is the message that I have been pushing for over a year at CUHK for a year now, and I’m glad to see that there is echo out there.
Some room for partnership-building.
The roundtable discussion ended on a very positive tone: collaboration.
Collaboration and the development of partnerships are actually one of the 17 Sustainable Development Goals, so the point made sense.
Beyond the anecdote, however, it became visible that the ability to engage in multi-sector discussion was a major way to move on. Because one way or another multinational groups, universities, Impact investors and NGOs of all sides can all learn from one another. And that, hopefully, could become an interesting way to develop a sustainable way to Impact our worlds. To be continued.