What is impact assessment?
While traditional businesses are evaluated from the perspective of risk and financial return, social businesses have a third essential dimension: impact.
The impact assessment is associated with the search for evidence of the cause and effect relationship between the evaluated business and the desired transformation, proposing to answer:
“What is the effect of an initiative on a result of interest?”
Why evaluate?
Assessing the social and environmental impact of the business is extremely important for the organization to prove its ability to generate the proposed social and environmental results. In addition, other reasons are:
How to evaluate?
An interesting practice to start this process is to define the Impact Business Change Theory, which describes the logic of how a project will achieve the desired socio-environmental results. This theory can be designed with the help of the “value chain”, a simple model that establishes the sequence of events that lead to the generation of impact.
Source: INSTITUTO DE CIDADANIA EMPRESARIAL E MOVE SOCIAL. Metrics in Social Impact Business, 2017. Adapted from THE ROCKEFELLER FOUNDATION. Catalog of Approaches to Impact Measurement, 2008
There are several methodologies and definitions for impact assessment, some approaches are applicable to different projects, allowing the comparison between businesses, while others are more personalized.
- Some industry references are:
- IRIS (Impact Reporting & Investment Standards) – metrics catalog
- GIIRS (Global Impact Investing Rating System) – tool that analyzes business performance
- SROI (Social Return on Investments) – mechanism for measuring social return for each investment
- Principle of additionality (control group vs. treated group)
How do we do it here at MOV?
We understand that transformation begins with motivated entrepreneurs to solve problems that are intrinsically related to the Sustainable Development Goals (ODS) for 2030.
Next, we identify, segment and quantify the size of the need or problem in its geographical context. The business model is then defined and a business plan is drawn up including outputs, actions to strengthen the ecosystem and expected outcomes. Outputs and outcomes are measured by us and / or partners, and compared against the problem they seek to solve. The ultimate goal is to generate a relevant contribution to the ODS reach.
We also use the GIIRS assessment system as a complementary measurement tool. In 2016 MOV became a Certified Company B and FIP MOV 1 was evaluated by B Lab / GIIRS.
