The Dark Side of Benefit
How to measure and manage negative impact
Purpose driven companies focus on creating a positive impact for all their stakeholders and consider the entire ecosystem in which they operate. Business decisions are guided not only by economic factors, but also by social and environmental considerations. Each decision a company makes has an impact on the ecosystem within and around it, and this impact can be negative, neutral or positive, but it is always there. mondora, a purpose driven company and certified B Corp, has placed most attention on the positive impact generated by its business decisions and actions. But what about negative impact? Until recently this was not formally considered in company processes. We made sure our business decisions weren’t having disastrous consequences for any stakeholder, but there was no formal evaluation and we had no metrics to go by.
It was not until the start of 2018 that we began considering negative impact more carefully in mondora. This year we were due for B Corp re-certification and we were also selected for a company audit, which required us to provide documentation for a large amount of Impact Assessment questions. Because of this, we started working on the Assessment in January, although the deadline was September, and we soon came across some new questions that were not present the last time we certified. Among these new questions was one we found in the various Impact Model sections: negative impact. After reading the question explanation and examples, we thought this was something we should also start considering in mondora. So we set up a small team to do some research!
The result of our research is an eight page document outlining the company’s main business and project activities, and evaluating the negative impact of each. It’s absurd to imagine a business which is completely free from negative impact, and it is also wrong to think about an absolute negative or positive impact, since it is not a simple matter of duality. Through our holistic approach to work, we found it empowering to try and define a report of what our “bad” footprint could be, in order to manage and reduce it. In order to reduce our negative impact we must be able to spot it and, if possible, measure the issues we find.
1. Creating a Framework
Considering negative impact is a complex process, so we decided to break it down into manageable steps. The first step was that of creating a simple framework with a set of categorisations:
Project: if the negative impact is related to a single customer or project; or Business if else.
Measurable: if we have a kpi or a metric that allows us to obtain a number. Not measurable if else.
Managed: if we think we have already — even before creating the report — managed this issue.
Manageable: if we think it is possible to reduce or remove the negative impact.
Unmanageable: if the resolution or reduction is outside of our control or if the trade-off is too expensive
Complex: if the voice was added by complex cause-effect chains so it’s a kind of hypothesis.
Traded: if the negative impact comes from the effect of a supposed-to-be bigger positive impact
2. Analysing the Data
With this framework in hand, we were able to categorise the main business processes and company projects and look more deeply into how we could measure and manage any unintended or potential negative impact that our business activities and decisions could generate. In the Business section of the document we considered things like company laptop manufacturers and suppliers, Cloud service providers, office food and drinks, commuting and business travel, heating and energy consumption, as well as university drop out rates (when developers find work before completing their degree) and relations with competitors. In the Project section we placed particular attention to our Benefit generating projects, to see if we were creating any unintended negative impact whilst trying to achieve something positive, and if we could then manage this impact better.
The data collected by the team indicates that Business negative impact is generally well managed:
- For laptop use and disposal we consider the impact to be traded, as we are not able to change our laptops to a “greener” alternative without compromising productivity, but we have at least set up an interdependence agreement with our laptop supplier and are able to donate used laptops to schools and charities.
- Office food, drinks, heating and water consumption are all rated to be measurable and managed or manageable: food and drinks are organic and mostly come from fellow b corps or local suppliers. Heating and water consumption are tracked and we are trying to meet annual reduction targets which we have set.
- Commuting and business travel are considered measurable and manageable: we are working on promoting measuring commutes by bicycle with cycle2work.io and counting carpooling journeys for example, but there is still room for improvement here and we will keep working on this. As for business travel we try to reduce it as much as possible and use more video conferencing. We also choose to travel by train or electric car whenever we can for journeys that are necessary.
- Paper and printer use is considered managed and measurable to 0 as we don’t have any printers and use Rockbooks notebooks. We are working towards achieving the same result of measurable to 0 for plastic waste too, but this point is still open and manageable.
- University drop out rates and collaboration with competitors are considered complex. We have set up a system to manage drop out rates by offering incentives and time off to hired students so that they complete their degree, so this point is managed. As for competitors, we have set up interdependence agreements with a few local businesses, but this point is very complex and difficult to measure.
As for Project negative impact, we were curious to analyse the projects that we consider as benefit creating and we discovered that the negative impact is mostly measurable and managed. This analysis was however extremely useful in raising awareness of the need to consider negative impact even when we think we are doing something extremely positive!
There is one project, Local Economic Development, which is not a software project but an organisation one focused on the local community. This project is considered complex, measurable and partly managed — indicating we still have work to do!
The negative impact document has proved to be a valuable resource for the consideration of our overall company impact on all stakeholders. The research and analysis we carried out has enabled us to become more aware of our actions and decisions — and to ask ourselves what side effects our positive actions are creating or have the potential to create, so that we can measure, keep track and find ways to manage them.
Does your company consider negative impact? We would love to learn what practices you measure and what strategies you have come up with to manage any unintended or potential negative impact!