As the damaging effects of global climate change become more and more readily apparent, many multinational corporations, who have themselves contributed heavily to climate change over the course of decades, are starting to change their tune.
Why? Well, there are many reasons for the switch. For one, corporations are starting to face serious regulation and legal scrutiny in certain territories, accelerating the change to more sustainable business practices.
Public image is also a major contributing factor for many customer-facing brands. For example, if a company’s marketing professes a desire to ‘change the world’ but that company continues to engage in harmful practices, there’s a clear contradiction that savvy consumers are bound to notice, and that could mean falling revenue, which would be bad news for wealthy shareholders and board members.
At times, there are also genuine motivations behind these moves. At the time of writing, Patagonia founder Yvon Chouinard has essentially given away his multi-billion dollar company stipulating that future profits will be dedicated to fighting climate change.
But that’s an extreme example. Many other companies are opting for a win-win approach by which they can contribute to sustainability and positive impact while also bringing in more money.
Impact investing is the name of the game here, and Impact Measurement and Management is a specialization that monitors impact efforts, essentially making sure that money spent in this area actually does what it’s supposed to do.
This is where we come to our special guest: Ishita Jain. As she details during the interview, Jain worked as an industrial designer at first, creating luxury products for wealthy customers, but she later felt motivated to pivot to design efforts that would help many people, not just the elite.
Her efforts in this area earned her a role with the Autodesk Foundation as an Impact Manager. She uses IMM standards and analysis to verify the utility and impact of the Foundation’s impact investments.
Jain spoke with us in depth about IMM, her work with the Autodesk Foundation, and ESG reporting, and you’ll find all of it below. This is a great resource for anyone who wants to learn more about the fascinating world of IMM, and it’s an especially useful starting point for young people who are thinking about pursuing a career in IMM or other roles relevant to impact investing and sustainability.
Can you talk about your transition to working in IMM?
From an industrial designer who worked extensively in the field, designing high-end luxury products, more recently, I shifted my focus to ‘design for social innovation,’ which centers on creating social conditions that result in increased equity, social justice, and a healthy connection to nature.
Design for social innovation led me to philanthropy and impact investing. I became increasingly interested in ensuring that our limited resources flow to the most impactful innovations for fighting the negative impacts of climate change and inequality which in turn brought me to IMM and ESG reporting. IMM is a process of understanding how much social change occurred and can be attributed to a technology, service, or organization. If applied properly it can be instrumental in scaling positive social impact.
About how long did it take to familiarize yourself with the standards of IMM and ESG reporting?
I continue to learn with my peers. This is a very rapidly evolving field, and one must be a continuous learner to keep up with the changing global regulatory environment.
Can you explain the purpose and key benefits of ESG reporting?
Environmental, social, and governance (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 (GHG) emissions, energy use, employee demographics, and philanthropic investments. The key benefits of ESG reporting include informing investors about a company’s ESG risks and opportunities to support their investment decisions, creating accountability for ESG commitments across the company and ensuring progress is made in support of those goals.
How can the average person find out which companies are currently engaged in IMM?
Like institutional investors, individual investors could also use an ESG score. This score measures how well a company or fund stacks up in terms of environmental, social, and governance factors. However, note that companies currently use various methodologies for calculating ESG scores, so there’s no one authority on ESG scores. Therefore, unfortunately, this requires a lot of research.
They can also read the company’s impact report. This report may outline how much a company has reduced its carbon footprint, or any changes to its policies such as gender diversity, pay equity, etc. Another good resource is the sustainability report as well as seeing how a company’s employees rate the work culture, on sites such as Glassdoor.
Do you feel that IMM still has room to grow, particularly in terms of standards and methodologies?
Yes, there are IMM standards, but not one size fits all, and therefore an opportunity to further develop them. Here are a few.
IRIS (Impact Reporting and Investment Standards)
The GIIN (Global Impact Investing Network), a nonprofit dedicated to increasing the scale and effectiveness of impact investing, promotes IRIS.
IRIS is a catalog of generally accepted metrics that measure social, environmental, and financial performance to support transparency, credibility, and accountability in impact measurement practices. IRIS serves as the taxonomy, or set of terms with standardized definitions, that governs the way companies, investors, and others define their social and environmental performance.
GIIRS Rating (Global Impact Investing Rating System)
GIIRS was developed by B-Lab, the nonprofit organization that certifies B Corporations and promotes the benefit corporation structure.
GIIRS is an impact ratings tool and analytics platform that assesses companies and funds based on their social and environmental performance. GIIRS Ratings are the “gold standard” for funds that manage their portfolio’s impact with the same rigor as their financial performance.
GIIRS uses IRIS metrics in conjunction with additional criteria to come up with an overall company or fund-level rating, as well as targeted sub-ratings in the categories of governance, workers, community, environment, and socially and environmentally focused business models.
SASB Standards
The Sustainable Accounting Standards Board (SASB) is an independent, private-sector standards-setting organization dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs.
GRI Standards
Based in The Netherlands, the Global Reporting Initiative (GRI) aims to make sustainability reporting standard practice so all companies and organizations report their economic, environmental, social, and governance performance and impacts. Its measurement tool, the GRI Standards, takes a global perspective on reporting publicly on a range of economic, environmental, and social impacts. It provides information about an organization’s positive or negative contributions to sustainable development. GRI claims to be the first (since 1997) and most widely used comprehensive sustainability reporting standard in the world.
Can IMM be applied to every major industry?
Yes, there is an opportunity to measure and manage impact in every major industry. Any hope of achieving the global goals articulated in the SDGs 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.
