Impact accounting and management is about improving your organization’s effect on the well-being of people and the planet.
The core process is:
1. Measure your impact. Consider who and what is significantly affected by your business. Measure what changes occur and the importance of those changes for these parties, or in the view of those who have deep knowledge of the issues at play.
2. Capture and analyze this information. Do it as frequently, and at as low a cost, as is prudent.
3. Use this information… to improve decisions, generate results, increase trust, obtain free marketing, define brand, grow goodwill, boost income, and reduce risk.
This process — a new business discipline, really — is impact management.
Impact management takes insights from scientific research and combines them with insights from market research, design, social media, information management, and finance to provide businesses of all types with timely information about what impact on people and the planet is resulting from their activities, how important that is to those affected, and how this affects the organization’s financial strength.
Impact management makes strategic use of third-party certifications and standards such as SASB, B Corp Certification, LEED, Fair Trade and other ways of signaling your value to the public. But impact management does not stop at these when they omit important information about risk, geography, and/or specific impacts that differentiate one organization from others.
The discipline builds upon core principles and standard processes.
The fields of Measurement and Evaluation, Social Accounting and Audit, and Social Return on Investment (SROI) Analysis, all employ principles which boil down to these:
- Involve stakeholders.
- Understand what changes.
- Value the things that matter.
- Only include what is material.
- Do not over-claim.
- Be transparent.
- Verify the result.