ABC of Enterprise Impact | ABC at Outcome Level
Introduction
An enterprise can classify an outcome experienced as Acting to Avoid Harm, Benefiting People and the Planet, or Contributing to Solutions based on data across the data categories that underpin the five dimensions of impact. Outcomes can be classified prospectively based on goals, or retrospectively based on performance.
Note that organizations might be contributing to positive and negative outcomes for the same group of people simultaneously, hence the importance of disaggregating by social identities, demographics, or behavioral characteristics to identify these differences and manage them accordingly.
ABC at Outcome Level
For simplicity, the ABC of impact is referred to as a form of impact classification. However, “Benefiting people and the planet” is technically an outcome classification, as it is based on a level of performance rather than a change in performance and does not require causation.
“Act to avoid harm” and “Contribute to solutions” are both impact classifications, since they require change over time that is caused by the enterprise. They differ with regard to whether the original below-threshold outcome was originally caused by the enterprise itself (“Act to avoid harm”) or not (“Contribute to Solutions”), and whether the outcome has crossed the threshold into the positive range, or is expected to do so during the period for which goals are being set.
Assessing individual impacts as A, B, or C
Organizations can assess progress towards these objectives by putting impact performance information in context. This information informs the management decisions organizations – and their investors – make.
Act to reduce harm: the partial reduction (or absence) of a negative outcome caused by the organization, to a level that is still nevertheless below the threshold. Assessing whether an impact is an A at a minimum requires the:
- outcome level in the current period;
- baseline outcome level, enabling assessment of the change in outcome over time; and,
- the societal or ecological threshold.
These data may be disaggregated by social identities, demographics, and / or behavioral characteristics if relevant to explore if different impacts are occurring for different groups.
Classifying an impact as Act to reduce harm
Benefit people and the planet: a sustainable outcome is created or maintained by the organization. Assessing whether an outcome is a B at a minimum requires the:
- outcome level; and
- societal or ecological threshold.
Classifying an impact as Benefit people and the planet
Contribute to Solutions: a positive outcome caused by an organization for people or the natural environment who were previously experiencing negative outcomes not caused by the organization (e.g., caused by market failures and / or marginalization through customs, laws, and policies). Assessing whether an impact is a C will often require the:
- outcome level;
- baseline outcome level, enabling assessment of the change in outcome over time;
- societal or ecological threshold;
- outcome counterfactual, to assess whether the people / natural environment would likely be experiencing a negative outcome in the absence of the organization
- number of people affected; and,
- social identities, demographics, behavioral characteristics, and geographic and cultural contexts of the group experiencing the outcome, if relevant to the type of need being met.
Classifying an impact as Contribute to solutions
The EU Taxonomy
The EU taxonomy is a classification methodology that uses this same logic. The EU has a policy objective of achieving net-zero emissions by 2050 and so the taxonomy lays out thresholds to assess whether economic activities “make a substantial [rather than marginal] contribution to at least one of the EU’s climate and environmental objectives, while at the same time not significantly harming any of these objectives and meeting minimum safeguards.”
IN THIS LESSON
ADDITIONAL Resources
- Impact of an enterprise template
- IMP: Interview with Kate Wylie, Mars
- IMP: Emerging Consensus about Impact Goals
