The word of the moment at impak is Qualification. Why? Because as you may know, we’ve developed an impact qualification methodology that is exhaustive, which enables to compare companies between them and that takes into account both positive and negative impacts. We’re so p-r-o-u-d of it! This methodology is at the heart of our Impact Investing Scoring Solution (or IS2), and is starting to attract interest from responsible and impact investment funds. Hurray!
The interest we’re seeing in this solution can be explained by the fact that there is at the moment no other impact qualification methodology quite like ours available on the market. Let’s just say it’s unique! But why is it so special, one might ask? Excellent question.
What is IS2?
We based our approach on the Impact Management Project methodology. This project gathers more than 2,000 businesses, experts and organisations worldwide that researched and developed impact norms. These norms are currently the most inclusive and advanced in the world. Now back to IS2.
Our methodology starts with a first questionnaire of a dozen questions, which is followed by a more detailed questionnaire of 50+ questions and finally, an impact due diligence in case the investor wants to outsource that part.
Pleasing to the eye and allowing comparisons
Our questionnaire’s greatest strength is that the same questions are used for every type of business, without adjustments. The results can be compared across different industries, fields or business activities. At the end of the second questionnaire, IS2 produces the impak Score of the business. The score can be calculated for any type of business, whether it has a positive impact or not, but businesses will need to obtain a minimum score to access impak.eco.At this point it’s important to mention that businesses currently on impak.eco have completed the first questionnaire and will have to complete the second questionnaire to ensure they can really be qualified as having a positive impact. The impak Score is quite interesting because it gives a quick overview of the impact of a business. A score is however not enough to summarize the complexity of the impact creation process, and it therefore has to be analyzed in parallel with another very important element that comes out of the questionnaires.Behold, the impact criteria matrix!
This qualitative analysis - using the same 15-criteria list - allows to compare businesses together, no matter the size or field of activities. It includes a diagram (a quite good looking one, I might add) and a complete report of both positive and negative impacts of the business. The analysis gives in-depth impact information to potential investors (who previously bought our service) and they can therefore choose businesses to invest in that fit with their impact thesis.
Positive AND negative impacts
There are not many methodologies on the market take into account both types of impact. Until now, mostly negative impacts generated by a business’ activity and the strategies to reduce them were reported (that’s responsible or ESG investing). Nonetheless, a business can generate positive impacts because of its products, services, structures, etc.
Taking into account both types of impact means we can avoid 99.9% of greenwashing. How’s that? Well, a business can help advance a social issue in a significant way, but on the other side could produce enormous amounts of negative impact. To only consider positive impact, even if they’re not significant, that’s the definition of greenwashing. In a world where this irresponsible marketing technique is so trendy, one can understand the relevance of IS2!
What about the SDGs?
Our questionnaires allow us to determine which Sustainable Development Goals (SDGs) fit best with a business’ activities. It can be related to its products (i.e. organic products), its services (i.e assistance to people fleeing conflicts) or its structure (i.e. employees previously with difficulties accessing employment).
We’re a bit Type A
To be able to match the most relevant SDGs with businesses, our experts have meticulously analysed the SDGs targets to extract about one hundred areas of impact, which can be matched more easily with a business’ activities. Why? It’s harder to match the SDG ‘Life On Land’ with Tentree’s activities (planting 10 trees for every item sold) than to match the ‘Sustainable Forest Management’ impact area. Furthermore, a business with completely different activities could also be matched with this SDG but under a different area of impact. This allows us to get an overview of the SDG and to have a precise idea of the business’ impact. A little bird once told us that having an SDG matching your business activities has become almost mandatory to be considered for impact investment. That’s great news!
Our qualification methodology is considered relevant and efficient by our current partners in this adventure. Nevertheless, it will need constant upgrading and will certainly evolve to become an even greater tool. What has been driving us from the beginning of this conceptualisation is our never-ending search for coherence. We are at a moment in history where environmental and social issues are enormous and greenwashing always harder to detect. Our duty and desire is to guide agents of change, whether they’re investment funds, citizens or businesses, in the most accurate and precise way way. One small step for the entrepreneur, a giant leap for…!
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