Metrics for the Net positive impact era

We are living in the era of net positive impact. In various industries and sectors, from conventional banks, corporations, government , startups to non profits, this is the leading edge of sustainability.

In October 2015 a group of banks and investors released the Positive Impact Manifesto, which calls for a new financing as a direct response to the challenge of financing the Sustainable Development Goals (SDGs). Corporations have embraced similar initiatives to make good making business , such as the Net Positive Project. But, how to measure success of a positive impact? It can be challenging as a raising number of methods and practices are emerging from different networks.

IRIS managed by The Global Impact Investing Network, a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing, is one of them. They provide a rich variety of generally-accepted performance indicators designed to measure the social, environmental and financial performance of impact investments. This database makes our life easier. The big challenge though, is which indicator, out of the 565, should we pick? To accomplish this task here are two main approaches we can take into consideration:​

Standardized

​This approach defines a set of standard indicators to all social enterprises regardless of their context, governance or country. Many large social investors prefer this approach (such as B-Lab or GIIRS) that facilitates comparability, however, fails to capture the specificity of the local context.

Venture-specific

This approach considers identifying the most appropriate social impact metric for each unpatterned social venture. It is widely accepted by academics and practitioners, who recognize the high influence of local context in the success of social interventions.

The European Commission’s GECES subgroup recommends adopting different metrics to capture the differences among social enterprise. GECES clearly states:

"no single set of indicators can be devised top-down to measure social impact in all cases"

We couldn't agree more with them. Social contexts are extraordinarily diverse and social ventures have been innovative on how to approach that, therefore, a standardized approach rarely captures all the strengths and risks of a social intervention. On the other hand, we are of the opinion that it is worthwhile sticking to standard impact indicators, such as IRIS and SDGs, when possible.

To learn more about this topic read: Policy for Social Entrepreneurship - OECD

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