Abbreviated White Paper — Proof of Impact

Fleur Heyns
Jan 26 · 8 min read

Entrepreneurs, consumers, corporations, and investors alike are demanding a transition from an economic model that measures our collective success in purely monetary terms to one that also reflects non-financial components, namely the impact that stakeholders have on humanity and the planet.

We are in the early stages of this transition to an economy where every asset, company, and investment can & will be assessed through the lens of risk-return-impact. But the problem today remains: how are companies reporting on the impact they’re having? How are consumers able to discern which companies positively impact the environment versus those that just claim to be impactful, as part of an insidious and pervasive “impact washing” trend? How can investors compare one company with another when it comes to assessing their value through a holistic lens?

This paradigm shift will only be made possible by scalable, end-to-end technological solutions, for collecting, verifying, and analyzing granular impact data in a transparent fashion — and enabling direct impact data streams that show the positive or negative influence companies have on the world.

A Data First Solution

While the market for impact investing is steadily growing, mobilizing capital to execute on this demand still faces a key challenge — to date, there has not been a trusted way to measure the non-financial performance of these assets in a dynamic and efficient fashion. Instead there has been a disjointed and convoluted effort to create impact measurement standards which directionally may indicate positive or negative impact but remain static & onerous to analyze. Amongst the leading frameworks most commonly used today are the United Nations Sustainable Development Goals, the IRIS Catalog of Metrics, IRIS+ Core Metrics Sets and the Impact Management Project’s five dimensions of impact convention.

Proof of Impact believes that attempting to converge upon a universally accepted measurement standard may be a “a journey up a blind alley” and what we actually need to unlock the ability to make more holistic decision making (with impact as a pillar) is better data. With a data first approach, investment capital can be secured, non-financial factors can be analyzed alongside financial ones, and then any type of impact measurement and management tools or frameworks can be applied based on the unique needs of each organization.

Challenges to A Data First Approach

The consequence is a set of related, yet unsynchronized set of workflows for performance tracking and reporting which result in data silos and resource intensive analysis.

Proof of Impact: Breakthrough Technology for Impact Driven Decision Making

Proof of Impact (POI) is working to transform the way that impact data is collected, verified, and analyzed by giving investors, companies and consumers access to trusted, actionable impact insights which empowers them to make data-driven decisions.

Proof of Impact’s Impact-as-a-Service model enables streamlined collection, verification, and analysis of non-financial data to help companies, investors, and consumers make better decisions.

Impact as a Service Model: Collect, Verify, and Analyze

Collection: Setting the Bar for High Quality Data

Verification: Transparent Authentication & Securitization on the Blockchain

Analysis: Standard Agnostic Insights

Every company or investor has a different approach to analyzing non-financial KPIs, and POI is standard agnostic when it comes to this analysis. The frameworks or standard KPIs for tracking non-financial performance are entirely up to the stakeholders. Proof of Impact provides a “plug-and-play” solution, creating seamless integrations with the tools and methodologies that a company or firm may already be using.

Company, Investor and Consumer Benefits from Impact Driven Decision Making

Companies

“It’s no longer good enough to be saying we are doing good work — we must point at data to prove we are doing good for people and the planet.”

Investors

With continual access to streaming impact analytics, investors are able to assess social and environmental risks alongside financial risks, setting the stage for investment products which incentivize impact performance while reducing the risk of the investment. Transparent impact data systems can transform the currently resource-intensive and periodic impact evaluations into dynamic systems for performance management and innovative risk models, which will ultimately drive deeper impact performance and align financial returns.

Consumers

The Way Forward

Proof of Impact wants to catalyze this transformation by using frontier technologies to help companies unequivocally prove that they can simultaneously maximize profit and generate positive outcomes for humanity and the planet. This proof of impact, provided via transparent, verified data collection and real-time, automated analysis can subsequently shift the investment paradigm to one of risk-return-and impact — a paradigm where non-financial outputs are weighted equally alongside financial ones.

Technology powered solutions can streamline & scale the demonstration of impact, however, POI is just one element in a multi-pronged solution. To really affect the grand scale change that purpose-driven investors, entrepreneurs, and enterprises are looking to achieve, every stakeholder needs to take significant actions.

Sir Ronald Cohen in his recent book, IMPACT: Reshaping Capitalism to Drive Real Change, goes into great depth about the specific, granular actions each economic contributor will need to undertake as part of this transformation:

‘It will take at least a decade to transform our system, and the transformation will unfold in stages: starting with impact investment and impact measurement; through the development of impact economies; to a new global system of impact capitalism.’

Proof of Impact is poised to tackle stage I, helping companies and investors set the new standard of investing with accountability for impact.

As we head into a new year of possibilities, let’s demand that every investment be a positive impact investment, that every company holds themself accountable, and that every consumer be given the choice to make empowered decisions.

Citations

  1. https://thegiin.org/research/publication/impinv-survey-2020
  2. https://www.unpri.org/download?ac=5426
  3. PAIN SPOTS AND OPPORTUNITIES REGARDING ENVIRONMENTAL, SOCIAL,AND GOVERNANCE (ESG) DATA, Karl Richter, page 24
  4. https://thegiin.org/assets/GIIN%20Annual%20Impact%20Investor%20Survey%202020.pdf, p. 11
  5. IMPACT: Reshaping Capitalism to Drive Real Change by Sir Ronald Cohen, p. 192

Proof of Impact

Making every data point count

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store