Is 2020 the year to codify your impact measurement strategy?
Written by Spring DigitalDx Ventures Fellow Michael Solotke
Are you using 2020 to rethink your impact measurement strategy? Are you lost in the acronym soup of UN SDGs, IMP, GIIN, and GIIRS? This article explores the frameworks available for impact measurement, using examples drawn from one particular impact investing firm: DigitalDx Ventures. This fund is an impact fund with a focus on early-stage companies developing digitally enabled diagnostics. Their impact measurement approach is shared as a model for other organizations that are interested in defining their impact strategy.
To aid in evaluation of impact, several organizations have developed and published frameworks for impact measurement. These organizations include the United Nations, Global Impact Investing Network (GIIN), Impact Management Project (IMP), Sustainability Accounting Standards Board (SASB), B Analytics, Transform Finance, and others. Because it can be challenging to understand the similarities and differences between these frameworks, we synthesized our analysis of these impact measurement options into one short article.
There are several components that exist in most of the impact measurement frameworks. For example, most frameworks include a term that specifies the intended effect of the organization. Many frameworks also include terms to specify the affected stakeholder, the timeframe, the scope, and the amount of effect attributed to the organization.
With this understanding, organizations need to choose an impact measurement framework to use. To make this decision, there are a number of characteristics to consider:
- Industry-specific vs. industry-agnostic
- Appropriateness for different types of organizations
- Reporting requirements
- Accounting approaches
- Implications for investors
For an example of how different impact measurement approaches are applied for a fund like DigitalDx Ventures, you can view their metrics here. Sharing their impact measurement strategy allows them to develop a community of LPs and portfolio companies that are aligned around a common vision of generating positive impact. Visit the DigitalDx Ventures website if you’re interested in learning more. Read the full article on the DigitalDx website here.
