Prove and improve – how impact reporting adds value
What to include in an annual impact report and examples from the B Corp UK community
As Certified B Corporations we hold ourselves to high standards in business. We recognise we are accountable to all our stakeholders, not just shareholders. We set ourselves the challenge of reaching a high bar on our social and environmental performance through taking the B Impact Assessment. And we subscribe to the principle of transparency by having our certification scores published on the B Corp website.
But given we only recertify every three years, those numbers go out of date. What about our progress in the meantime? If we are really to be transparent about our progress, we need to be reporting on our impact more regularly.
If that sounds like a lot of work, it doesn’t need to be. Smaller businesses should spend less time reporting than larger ones — in proportion to the scale of your impact. Don’t unbalance the work of the organisation to produce a report.
Alongside proportionality, other principles to apply are completeness and clarity. Don’t leave out areas of significant impact because it’s bad news — you need to present an honest picture so readers can draw well informed conclusions about your business. And be clear: don’t use indirect, flowery language but cut to the chase.
What should go in your impact report?
Impact reports need to take your reader on a journey from why you exist, through the difference you have made, to how you will grow your impact in the future so you should cover:
1. Need, purpose and vision: What is the problem that you are trying to address? What’s your purpose? What’s your vision of a world made better by your work?
2. Activities: What’s your mission, ie what do you do each day to work towards this vision of a better world? How do these activities hang together?
3. Current impact and evidence for it: What are the results of these activities? How do you know you’ve made a difference? Show us the data.
4. Future impact: What have you learnt? How will you change what you do?
Need, Purpose and Vision
Certified B Corps exist for a reason — social purpose is hard-baked into our DNA. But before you get into that, set the scene. Give us your view of the state of the world as context for your purpose.
Triodos Investment Management does this really well. Their page on financial inclusion leads with a paragraph titled ‘Addressing global challenges’, where they tell us ‘There are 1.7 billion people worldwide who have no access to basic financial products and services’. And that ‘We strongly believe that access to finance, from opening a bank account or savings account to taking out loans or insurance, is vital for driving economic and social development, and personal development’.
Pukka are one of several companies to reference the Sustainable Development Goals (SDGs). This makes sense: as the world’s ‘to-do list’, it is a solid framework from which to establish any B Corp’s vision. Pukka, I think rightly, focuses on ‘seven of the goals closest to our business impact’ rather than saying they are working on all of them. This focus on ‘material issues’ helps the reader identify your particular contribution and suggests management rigour and clear thinking.
Remember impact is triple-bottom line: economic as well as environmental and social. And in their ‘Purpose Progress Report’ Cook, the frozen food people, have integrated their annual financial report into their impact report, making the link between purpose and profits. No margin, no mission!
Activities that work towards a vision of a better world
In the activities you undertake, the reader should get a sense that they all work towards the overarching vision in a coherent way.
EQ Investors present a solid case for how they invest and what change they are seeking as a result. Their three-tiered model of investments — act to avoid harm, benefit stakeholders, contribute to solutions — is a robust framework. They go on to cite over a dozen mini case studies that show this thinking in action.
Charity Bank presents a very clear theory of change and illustrates the impact they have in a vibrant blend of testimonials, numbers and stories.
Impacts and the evidence for it
And while we all love a good story, it’s important to show that your initiatives are having an impact on the issues you set out to address.
Conscious of the need to limit global heating to 1.5 degrees, WHEB Asset Management explain in their report illustrates how £1 million invested with them compares with Global Capital Markets and visually makes the strong case that their investment strategy outperforms industry norms.
This benchmarking of performance is an important aspect of telling a good story about impact. Bethnal Green Ventures are rightly proud of their consistent effort to tackle the flow of venture capital to all-female founder teams. And this year they smashed it. Presenting data from across five years, we can see how 44p in the pound has gone to those businesses compared with the industry average of less than 1p in the pound.
Setting yourselves SMART targets (specific, measurable, achievable, relevant and time-bound) and then reporting on progress is also a sound way to demonstrate your impact over time. COOK have set a number of 2020 targets and flag up their progress towards them throughout their report.
Future impact
Like any good piece of writing, your report should have a beginning, middle and end. Looking to the future and recognising how you can get better strikes the right note of humility. As Tribe say in their refreshingly plain-speaking report: ‘We don’t pretend to be perfect. We are committed to engaging with our stakeholders with humility and honesty. There is huge room for improvement in all we do…’.
In Junxion’s first impact report we were challenged to provide more detail on the difference we made compared with other consultancies. After all, impact is ‘positive change that would not otherwise have occurred’. So, this year, we have issued a client questionnaire asking our clients ‘what did we do that you were not expecting from a consultancy’. The results have been illuminating and we will be covering this when we issue our second impact report very soon. Watch this space!
And further into the future
Reporting your impact forces you to reflect on why you do what you do, which activities you undertake and how you know you are making a difference. These are all valuable questions that we as B Corps should be asking ourselves. And putting it out there is a chance to demonstrate that you walk the talk. Impact reporting helps you both ‘prove and improve’.
And there are benefits beyond this too: transparency is an invitation to collaborate. A clear, accessible report that tells readers what they need to know, and is written in a credible and humble way invites engagement from new customers that will help you survive and thrive, with new investors that can help you scale, and with values-aligned employees and suppliers who will support your growth.
Every UK certified B Corp is required to write an impact report. So what are you waiting for? Let’s B The Change.
By Adam Garfunkel with research by Asya Ostrovsky. Adam Garfunkel is Co-owner and Managing Director at Junxion Strategy, a Certified B Corporation. He is a B Leader and B Corp Ambassador and has been advising companies on improving social and environmental performance, transparency and accountability for over twenty years. Reach him via adam@junxion.com
Download B Lab UK’s guide to writing an impact report here.
A first step for businesses interested in measuring their social and environmental impact is by using the free B Impact Assessment tool. Any company wishing to certify as a B Corp has its performance assessed by B Lab across all dimensions of its business. These companies are on a journey of continuous improvement to ensure business leverages its power to be a positive force in the world.
