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Business Impact Unpacked

Richard Hardyment

One of the questions that companies often ask us is: why does impact matter? For some, calculating the benefit for the community or the environmental footprint of a project is simply a matter of good business. In some sectors, it might even be a regulatory requirement or a prerequisite for entering a new market. But for us, the real value is not the assessment itself. There’s a clue if we unpack the word: imp-act. It’s actually what you do afterwards, that ‘act’ bit, that really creates the value for everyone involved.

Let’s look at an imaginary example. BallBearings Inc is a global manufacturer of, unsurprisingly, ball bearings. It has a footprint that spans the iron ore mines of Brazil through to the skateboarders of San Francisco who ride the sidewalks, safe in the knowledge that BallBearings’ ball bearings will keep their boards rolling smoothly. Recently, a somewhat aggressive non-profit has been sending letters to the Chief Executive demanding to know more about the company’s human rights impacts in Latin American mines. Some of the largest institutional investors have also been lobbied and begun asking questions about BallBearings Inc’s suppliers. The pressure is mounting.

So BallBearings does what any sensible company would do and commissions their sustainability advisors to investigate. An impact study is undertaken. Visits are made to operational and supply chain sites. Data on the social, environmental and economic aspects are gathered by questionnaire, interview and workshop. The number crunchers get to work and flesh out a picture of the positive and negative touchpoints all along the global ball bearing value chain.

A weighty report lands in the inbox of the Director of Corporate Affairs. She clicks through in fascination. Who would have thought that BallBearings supported the livelihoods of so many? Then fascination turns to concern. Perhaps the criticism about standards at some of those mines is warranted. A meeting with the campaign group is arranged. A constructive discussion follows on the basis of the data. But then the killer question arrives: “what are you going to do differently as a result of all this?” the campaigners ask.

This is a fictitious example. But it’s based on a real client project where we used impact studies to channel action at the areas where it mattered the most. It illustrates the major issue with most impact studies. All the data and insights in the world don’t mean anything unless the company changes something as a result.

  • Which are the strategic levers that the company can pull to maximise its impacts of certain areas?
  • What new project or target will be launched as a result?
  • How could a different business model be piloted to enhance social impacts and create new routes to market or a more resilient supply chain?

 

Our new report, Impact for Change: Better Business in a Better World, contains more examples. It also outlines the steps that any organisation can take to better understand its impact. But the bigger point we make in the report is that analysis is not enough. Too often, impact assessments just sit on the shelf or get archived in the inbox. But the real value comes not from the IMP but the ACT. Whether you’re a business, campaigner or interested citizen, let’s not forget: it’s action that counts.

 

Richard Hardyment is Head of Research and an Associate Director at Corporate Citizenship.

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