Learn to see companies’ impact as part of a chain: the logic model approach, and look at the different dimensions of impact: the what, the how much, the who.
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A company can impact society and the environment through its products & services, internal processes, and philanthropic activities.
How do you define “impact”?
A classic dictionary definition is:
Impact (noun /ˈimpӕkt/)
“Strong effect on someone or something”
... However, this is quite vague, large and intangible.
Let’s look at the meaning of impact in the context of measuring it.
Frameworks to evaluate impact
Assessing impact can be a challenge. The good news is that many frameworks exist to guide you as an Impact Rater to conduct an objective and rigorous evaluation of companies' impacts.
We took the best of these methodologies and applied them to our model.
In this article, you'll find a condensed version of what you need to know to be able to analyse impact.
1. The Logic Model
To look past greenwashing or company bashing, it is essential to break down a company's impact into smaller components part of a causal chain.
This model is called the logic model, and it looks like this:
At Impaakt, we only focus on the outputs, outcomes, and impact of companies’ actions, which are tangible effects, as opposed to their intentions, inputs, or activities.
Still not sure you understand this approach? The example below will help you understand the difference between intention, input, output, outcome, and impact.
Intention: The company is committed to improving the livelihoods of four million farmers.
Input: The company created an internet-based intervention that gives farmers access to information about soil and seed quality, prices, and weather.
Output: The internet-based services reach out to more than four million farmers growing a range of crops in over 40,000 villages across eight states.
Outcome: Four million farmers have benefited from an average of 2.5% higher prices than the traditional market for agri-products.
Impact: Thanks to the internet-based intervention that was implemented, after one year, the farmers are able to tackle challenges posed by unique agricultural features, such as fragmented farms, weak infrastructure, and the involvement of numerous intermediaries.
Who experiences the effect and how underserved are they in relation to the outcome(s)?
Examples
1. Potentially 54 million customers in the US, Europe, and Indonesia
2. Farmers from rural areas of Ghana spread across 1,644 communities
3. Companies’ Products vs Processes vs Philanthropy
You should think about the following ways a company can impact the planet and society:
Through its products and services (for example, vaccines or internet access) and its influence on society (for example, disruptive technology or market transformation).
Through its processes and practices (for example, industrial pollution or job creation).
Through its philanthropic or CSR activities (for example, education initiatives or water conservation projects).
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With the right investment companies having a positive impact on the planet are able to flourish. Our community forms part of that mission by measuring their impact.