If you do not know about the SDG’s, then you must have been living under a rock for the past five years.  The SDG pictograms must be the most widely used icons ever as we see them all over in foundation reports, corporate sustainability reports, impact reports and investor reports.

According to the 2020 CECP Global Impact at Scale Report – which drew on survey data from 168 companies from 23 different countries;

• Seventy-eight per cent of participant companies include the SDGs in executive level materials;
• While 47 per cent of the companies consider the SDGs to be integrated into the company’s overall strategy;
• And for another 34 per cent, the SDGs serve as a framework for social investment.
• These companies direct their SDG reporting to the sustainability department.
• Overall, the CECP report suggests that “the SDGs have now evolved from being a buzzword to becoming a framework for sustainability conversations at the global level”.

How does this translate into concrete Key Performance Indicators (KPI)?

• The bad news: based on an analysis of the Bloomberg ESG database and the CECP research data, only “19 per cent of companies have set a quantitative target for achieving at least one of the 17 SDGs. (n=1842)”.
• The good news: “The median community spend of companies that have set a quantitative target for achieving one or more of the SDGs (n= 200) is US$10.4 million, four times higher than the median community spend of those that have not set a target for achieving an SDG: US$ 2.6 million”.

This is an amazing correlation. The commitment to a quantitative target seems to affect the actual community spend. Additional research will have to show whether the process of defining a quantitative target causes a more intensive analysis of what resources are needed to create impact.

Does this process create stronger corporate impact strategies? What does this mean for all the companies working on new ESG strategies and targets right now?

For us at Next Generation, having worked on impact measurement and evaluations with foundations, business-owning families and companies, this data does not come as a complete surprise. The moment you start to reflect on your impact and the targets that describe it, you also start to consider what is necessary to achieve it. Reflection is often the first step towards action.

Social impact is often about qualitative change

As somebody striving for evidence of impact, I do miss the qualitative targets in such an analysis. Often, only the contextualization of an intervention and the qualitative description of its impact is meaningful in describing success, grounded in a solid Theory of Change.

When you fund education, you do not only want to know how many students are going to class but also what they are taught and how. The historian Jerry Z. Muller wrote in his 2018 book The Tyranny of Metrics: “The tendency is to treat as pure, measurable science what is of necessity largely a matter of art, requiring judgement based on experience.”

Quality of education or gender equality, as aspired to in the SDGs, are good examples for this.

Impact: the modern baseline of good philanthropy

Sharna Goldsecker and Michael Moody describe in detail in Impact Generation – How Next Gen Donors Are Revolutionizing Giving that in a new “Golden Age of Giving” the next generation of donors want nothing less than an “impact revolution” in philanthropy. The authors show that this is not only true for tech entrepreneurs but also for donors from diverse backgrounds.

Returning to opening statement at the beginning of this article there are many foundations, trusts, philanthropists, social and impact investors who want their giving to make a major difference, to have an impact. For them the SDGs are a translation of their aspirations into more than just icons.

The SDGs are not perfect, but they open the door to intense client conversations about impact. The effect of the SDGs on the corporate discourse on impact targets is an indication for this. It is not that difficult to enrich this conversation with a few good additional questions to explore the qualitative side of impact:

• What do you want to achieve for the respective Sustainable Development Goal?
• What kind of impact really matters to you?
• What do your stakeholders think about that change?
• What stories of change do you want to capture?

With these questions in mind, the topic of impact measurement becomes a conversation starter, not a stopper. Who does not want to envision positive social change and what it could look like? These are difficult, intense conversations. Nevertheless, they are good and important ones. As it stands, we have less than 10 years to achieve those global targets.

Maybe they really can help to realize mankind’s dream of a sustainable planet for all of humanity.

Next Generation is a specialist management consultancy that focuses extensively on impact management and measurement. The Investment Impact Index was created specifically to assist social and impact investors measure the impact of their actions, investments and sustainability targets. Our impact management approach is trademarked, and our technology platform not only captures impact data, but also provide deep analysis and impact insights. For more information or to have a conversation about your organization’s impact contact us at info@investmentimpactindex.org