Environmental, Social and Governance (ESG) standards have grown in popularity with increasing consumer consciousness and regulations. COVID-19 has also played a huge role in accelerating the integration of ESG initiatives into business strategies.
We are excited to launch the “Techstyle Impact Playbook – Strategies & Measurement Tools” focusing on the fashion and food industries. This playbook acts as a starting guide for startups and corporates to create ESG goals, define their strategy and measure their impact, while offering advice for investors to effectively evaluate and communicate their portfolio’s impact. We also identify the key assessment tools, resources, and impact investors to help kickstart your impact measurement journey.
Full Report and access a list of key impact investors
3 steps to impact measurement and communication
The report shares about 3 key steps in thinking about impact strategy, measurement and communication.
Figure 1. Three important steps for impact measurement and communication
1. Defining Impact Strategy: What’s the target impact area?
Identifying the target impact area helps companies navigate their purpose to develop a theory of change process, embed impact into the businesses model, collect data to measure impact and improve services.
For investors, ESG impact evaluation starts from a well-defined sustainability focused investment thesis, followed by due diligence. It is also important for investors to consider how they can support and help companies drive for impact by using data collected in decision making, risk mitigation and impact maximization.
Figure 2. Range of sustainability impact areas across ESG that companies can focus on
(Source: CFDA Guide to Sustainable Strategies, MSCI, SPG Global)
2. Impact Measurement: How to measure the impact?
Understanding why we measure ESG and who to share ESG reporting with is always the starting point of business impact measurement. It helps businesses to further analyze stakeholders’ demands, identify appropriate metrics and monitor ESG outcomes throughout the impact measurement process.
It is important to understand what you want to measure for your business, as there are many measurement tools existing in the landscape. Companies should choose the tool that best fits their business models and objectives.
Figure 3. Measurement tools in the landscape
Amongst various standards, 3 key tools stand out for techstyle startups and corporates to get started on impact strategy & measurement: 1) B Corporation, 2) United Nations Sustainable Development Goals (“UNSDG”) Mapping, and 3) Lifecycle Assessments. In this report, you can see the comparison between these three impact measurement tools in terms of key impacts, application processes and case studies.
3. Impact communication: How to share about impact?
Increasing customers’ consciousness on sustainability accelerates the need for brands to communicate their impact strategy & initiatives. Large brands, especially the publicly listed ones, usually work on ESG initiatives for public reporting to respond to investors and customers’ greater scrutiny. While for SMEs, their impact is typically more financially driven in order to attract funding from impact investors or pilot opportunities with brands.
Figure 4. Key areas to communicate sustainability to the world
(Source: Fabrica analysis)
Companies can communicate their impact with consumers or partners in 4 main methods: impact measurement, product development, consumer engagement, and crossover partnership. In this report, we have illustrated the concept with case studies of several sustainability focused brands: Allbirds, Ben & Jerry’s, Patagonia, PepsiCo and Bain Capital Double Impact.
In the appendix, we also list out the different impact assessment tools, resources and impact investors.
If you are interested to find out more, please download the full report of the Techstyle Impact Playbook.
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