Spend a couple of minutes on google and you’ll find a host of impact measurement and management (IMM) tools and frameworks. It can be hard to know which to use and why and how a tool like Impactable is any different. This is the first in a series of blogs designed to help map the IMM field and what makes Impactable’s platform special.

There are three main fault lines that tend to divide the field:

1. Core function: ESG vs Impact
2. Target users: Funders vs Enterprises
3. Target market: Public vs Private

In this blog, we will take a deeper look at the first of the three.

Generally, Impactable focuses on impact data and analytics in the private market with an emphasis on creating value through IMM for enterprises and reconciling impact with financials.

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ESG and impact get conflated quite a lot. Sometimes people talk about ESG risk vs value. Fundamentally ESG (Environmental, Social and Governance) was designed for risk mitigation. ESG metrics focus on a company’s internal operations like jobs, diversity, supply chain, and the policies a company has in place to evaluate the degree to which a company’s financials and growth prospects could be exposed to instability or liability. When a company uses forced labor in their supply chain, for example, or sources natural materials from a location where drought or flooding are likely, these pose material risks to a company’s financial sustainability. 

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Impact by contrast looks at value creation. It considers the degree to which a company or product affects change on a social or environmental problem: increased access, improved outcomes, reduced use of finite resources. It requires thinking through what would have happened under likely alternative scenarios. We don’t get credit for giving someone something they would have already had, or doing something they would have done anyway. We get credit for the change that can be attributed uniquely to some kind of intervention. Impact also happens on a continuum of ripple effects, considering both direct and indirect outcomes. These are especially difficult, if not impossible, to measure. How does an organization collect data, for example, to confirm whether increasing access to clean water really did reduce waterborne disease, or whether a returning citizen reoffended after being hired for a full time role? Its not easy.

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While Impactable does have an ESG panel, it really excels when it comes to impact in six key ways: 

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1. Any impact vertical, any innovation, anywhere

Unlike some platforms that focus on just real estate or just climate, with Impactable, users across virtually any industry, any impact vertical or any geography can select the impact metrics that are most meaningful for them, align those with global standards and understand the multivariate effects.  It's not limited to climate, healthcare or education. The reality is that impact does not live in silos. It's systemic. Innovations ostensibly focused on climate have effects on human health and economic development. Teams shouldn't have to use multiple platforms for each. 

2. Users can start with estimates

We’ve long accepted the value of assumptions in financial modeling. Everyone knows that a financial projection will not be accurate, but there’s value in making defensible assumptions to understand and communicate whats possible. The same is true for impact. Impactable allows users to start with estimates if they’re considering rolling out a new product in a new market, or haven’t yet collected impact data. Impactable is designed to meet users where they are, and evolve with them as they grow. 

3. Quantifying Attribution

When quantifying impact, it is important to understand what changes can be uniquely attributed to an innovation. If you sell solar panels, but all your customers would have otherwise bought equally quality renewable energy alternatives, then your product may not be the direct contributor to greenhouse gas emission reductions. Impactable allows you to compare the outcomes of your product with the most likely scenarios that were before your innovation or would have likely occurred if your innovation did not exist. 

4. Outcomes Predictions

Impactable predicts and quantifies indirect outcomes by drawing from a vast array of third party research and data. We know, for example, that by giving people access to clean water, we can reduce waterborne disease. We know that when we reduce the duration of wildfire burn time, we can reduce property damage and wildfire smoke exposure. Of course primary outcomes data is ideal, and users can override any system generated outcomes with primary or proprietary data and research. But given how important outcomes are and how difficult outcomes data can be to collect, proxy research and data offer a valuable alternative. 

5. Impact Monetization

Impact is value. When solutions can enable more efficient resource use and improved outcomes, they can save massive costs and unlock new value. Recidivism, climate change, truancy, pandemics - these are expensive problems. When an innovation improves crop yield, reduces the duration or severity of medical conditions, or increases access to jobs, these have direct economic implications.   Metrics and outcomes only go so far. One company might serve two people at a deep level. Another might serve 1,000 ppl at a very shallow level. While metrics and outcomes can shed light on depth vs breadth, neither captures the economic value directly. Social Value International and the IFVI have done important work on this topic. Impactable is the only platform that helps companies apply it to their work. 

Valuing impact serves two other important functions as well. Denominating impact in a dollar value enables us to aggregate across different metrics and outcomes. Single products often have multiple outcomes which are impossible to aggregate at a product level, let alone for a company overall. Now we can. Valuing impact also enables us to integrate impact into traditional financial analyses. This, we believe, is critical for the mainstream adoption of impact. Now we can generate the kinds of metrics like ROI, IRR for impact that we’ve long embraced in finance. 

6. Social Return on Investment, Cost/Benefit Analysis or Impact Multiple of Money

The idea of evaluating the social return on investment has been around for some time now. TPG Rise Fund coined the term “Impact Multiple of Money” bringing a similar concept to impact investing. But while access to the concept is embraced by many in the impact investing field, its application can be difficult.  Impactable is designed to help companies and investors alike apply it to their work. 

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^{Image source: https://impactentrepreneur.com/esg-and-impact/}