Last Updated on August 9, 2024
Today’s article is all about positivity. Leading companies are now putting substantial resources into what’s called Impact Measurement and Management, commonly shortened to IMM, and ESG reporting, which refers to the disclosure of environmental, social, and corporate governance data.
Both IMM and ESG reporting are more complex than they seem on the surface, and we’ll be talking about some of those complexities soon enough, but the good news for companies and the general public alike is that the adoption of IMM represents a major push for increased corporate accountability.
IMM helps company leadership, as well as rank-and-file employees, understand exactly what their impact is on the world at large, and on multiple levels as well.
ESG reporting makes this information available to a much wider audience, which only increases accountability even further.
Measuring and managing corporate impact also helps a given company make informed decisions about which organizations they partner with and/or invest in.
One false move, i.e. investing in a company that has a decidedly negative impact on the world around it, would make the investing company accountable for enabling that negative impact.
Further, reporting this negative impact could lead to a loss of investors and maybe even an unfavorable public image.
That’s what accountability looks like, and it creates the kind of corporate environment where companies have multiple incentives to keep their negative impact low and their positive impact high.
For the past four years, Ishita Jain has been working as an impact manager, and she currently works for the Autodesk Foundation, which is the philanthropic division of software giant Autodesk.
After finding success as an industrial designer for luxury products, Jain got involved in social design and human-centric design, even judging multiple social design competitions for institutions like MIT and UC Berkeley.
Soon after, she pivoted to IMM, and she has since made a name for herself within the IMM community, leveraging years of experience in design and design thinking.
If you’d like to check out some of her writing on IMM, you can follow this link, and if you’d like to learn more about IMM and ESG reporting with the help of Jain’s commentary, all you have to do is keep reading.
Defining IMM
The first order of business is to provide a more thorough definition and understanding of IMM in practice. Thankfully, Jain has us covered on both fronts.
First, the definition.
“According to GIIN, impact measurement and management includes identifying and considering the positive and negative effects one’s business actions have on people and the planet, and then figuring out ways to mitigate the negative and maximize the positive in alignment with one’s goals.”
Mitigating the negative and maximizing the positive. That’s at the center of everything, but actually achieving this in practice isn’t simple by any stretch.
Turning to Jain’s IMM work with the Autodesk Foundation, informing investment decision-making is a major priority. These investments represent philanthropic spending, and the Autodesk Foundation wants to do the most good possible with each investment.
This requires rigorous analysis of organizations and innovations that are candidates for investment spending.
Jain explained that this requires the Foundation to seriously consider drivers of impact, any likely assumptions, and the risks associated with adjusting and improving the impact performance of organizations the Foundation invests in.
“It’s crucial to validate that a technology, service, or organization is making a measurable social and environmental impact. We do this by defining an impact goal, planning how to measure it, measuring it, analyzing the data against the impact goal, learning from the process, improving, refining the approach, and repeating this process.”
IMM teams are constantly looking for ways to improve and refine their processes, which indicates their dedication to IMM as well as the relative newness of IMM deployment.
In terms of IMM best practices, Jain says that there are actually numerous IMM frameworks and methodologies. There are also metrics for measuring impact, such as tracking the amount of greenhouse gas emissions reduced, which is reported as Metric Tons of CO2 Equivalent, AKA CO2e.
An organization prioritizing IMM can also measure product innovations, work placements, and specific individuals as a means of tracking impact drivers and considering potential investments.
So that’s a brief introduction to IMM in both concept and practice. Now we can move on to the other major component of corporate accountability: ESG reporting.
Defining ESG reporting
It’s right in the name: ESG reporting is more about reporting than impact-driven action. In a basic sense, it’s a way for a company or organization to report how well they’ve been executing decisions that result in positive impact.
This reporting is meant to be read and examined by outside parties, and those outside parties are often considering investing in the company in question.
For a more thorough definition, let’s go to Jain.
“Environmental, social, and governance, or ESG, criteria are a set of standards for a company’s operations that investors use to screen potential investments.? This means publicly reporting metrics that demonstrate a company’s progress and impact, such as greenhouse gas emissions, energy use, employee demographics, and philanthropic investments.”
For investors who prioritize impact, reliable ESG reporting is absolutely crucial. It informs investors about the various potential risks and opportunities associated with a specific organization.
This reporting can also keep a company honest. They can’t just report one thing and name various initiatives they’re planning, all for the sake of attracting well-meaning investors, and then just not deliver. ESG reporting contributes to accountability in a big way.
Is IMM essential?
There’s no doubt that the goals and outcomes of IMM appeal strongly to anyone hoping to change the world for the better.
But does IMM stand a chance of becoming truly mainstream? Even further down the same line of questioning, will IMM be essential for the majority of companies going forward?
Jain made some strong statements about the ongoing adoption of IMM and the major effects of the pandemic on corporate culture and leadership.
“I think corporate leaders are now paying attention to IMM. The COVID-19 pandemic has forced corporations to scrutinize their responsibilities and role in society through ESG reporting. Any hope of achieving the global goals articulated in the SDGs [sustainable development goals] and recent climate conferences requires making a transformative change in how businesses operate, a firm grasp on data and insights about impact goals, and a deep commitment to acting on them.”
It takes a great deal of time, and a substantial amount of resources, to both ideate and execute IMM initiatives and investments.
But based on the last few years, IMM considerations really do seem to be more common than ever, and companies that don’t make an effort to catch up definitely risk being left behind.
IMM complexities
We hope that we’ve already convinced you of some of the complexities of IMM and ESG reporting. But if you still don’t believe us, we asked Jain to describe some of the most significant challenges she’s faced during her IMM work with the Autodesk Foundation.
“Assessing the impact of the organizations and how they can be scaled is complex. Most investors support a diverse portfolio of impact investments across multiple sectors and stages, which makes IMM both complex and resource intensive. It can become overwhelming very quickly, and it’s easy to get carried away with a host of metrics and lose sight of what really matters.”
To say that there are lots of moving parts to IMM analysis would be a major understatement, especially when metrics, no matter how accurately measured, don’t provide a full picture of how an organization is operating in the real world.
So how can IMM professionals stay dedicated to their work without becoming completely overwhelmed? Jain has definitely found her own tactics for working through difficult stretches.
“I’ve learned that this is an evolving area of work that requires patience and comfort with ambiguity. It’s important to have a long-term view of impact and stay true to the ultimate objective of creating impact accountability and generating actionable insights that can help maximize benefits to both people and the planet.”
Again, IMM is still relatively new, at least in practice, and the IMM professionals working today are pioneers in a sense. From a certain angle, that’s exciting, but it also presents many challenges for which there aren’t necessarily pre-existing solutions.
But thankfully, Jain herself is extremely passionate about IMM and the effects of her work, which goes a long way toward maintaining motivation when things get difficult.
Moving IMM forward
So where is IMM headed next? Well, it’s set to improve, not only in terms of widespread adoption but also in standards and best practices.
Jain:
“There is an opportunity to continue working to develop our IMM analysis to push ourselves towards more meaningful metrics, support our portfolio organizations, and advance the industry. We need to get better at understanding the actual as well as future impact of our interventions on people and the planet by gathering meaningful data, drawing actionable insights, and making the best predictions.”
IMM is indeed impactful, and hopefully it really will become the way of the future, sooner rather than later.
