Fortune.com, Daryl Collins, June 23, 2023
ESG has come under fire in recent months, with questions swirling about whether ESG efforts are truly making an impact or simply lining investors’ pockets. It’s not the first time the industry has faced backlash. Models for measuring impact are complex and difficult to standardize.
Social impact has been particularly maligned, with calls to skip measuring it altogether. Our industry has known for a long time how frustratingly difficult it is to come up with a measurement method for social impact that is both comparable across companies and not overly onerous on the business.
Often, the quest for comparability has devolved into a checklist about company intent. This superficial approach makes no attempt to listen to the people who are experiencing the social benefit. The alternative–actually speaking with those beneficiaries–is seen as prohibitively expensive and resulting in data that sits in a silo and cannot be compared across companies.
Impact is a journey, not a switch. Typically, people do not grow out of poverty in 10 years–it’s more like a generation. We need to see impact measurement in the same way: it happens over time, in fits and starts, and it can even change direction over time as people, products, and the world change.
For years, I used a financial diary method to conduct in-depth research with vulnerable populations all over the world and provide deep insights into the financial practices of these families.
When COVID made face-to-face interviews difficult, we began using technology-enabled methods in our research, including Natural Language Processing (NLP). We’ve now realized that these methods are better at tracking social outcomes, thanks to the ability to pick up nuanced responses cheaper and faster.
We work with companies all over the globe, tracking their social impact on vulnerable people. Each of these companies does dramatically different things and has a dramatically different social impact.
