Friday, 5 October 2012

The business of measuring impact

By Vivienne Benson

Measuring impact should not be a post mortem, according to Vinay Nair, Business Development Manager at the Acumen Fund.

Vinay was responding to the conundrum we have posed in the latest Business and Development Seminar Series: how do you assess the impact of business on development?

Is considering impact just a case of measuring outputs?
Within his presentation, Vinay explained the Acumen Fund approach in measuring outputs to ascertain the company’s impact. Husk Power Systems (HPS), a company hailed by Vinay as a successful Acumen Fund investment, founded in 2007 to reach the 20,000 villages considered out of reach by the Indian government. The company takes agricultural waste, rice husks otherwise left to rot, and converts it into gas that powers an off-the-shelf turbine to generate electricity.

Essentially, the HPS output is 75 operational plants in Bihar which serves 150 villages, or more than 150,000 people, and yet ultimately the impact is vast:
  • Extends villagers’ activities beyond daylight hours
  • Promoting economic development and microenterprise
  • Reduces indoor air pollution
  • Improving health
  • Increases the time children can study 
  • Improving education
  • Reduces the amount of time women spend collecting firewood
  • Increasing gender equality
  • Reduces emissions
  • Protecting global and local environments.
So when assessing impact, the question that Vinay posed to the seminar participants, is how do you measure the value of education from a good reading light? It is a challenge, so beginning at the level of output seems a good place to start.

The Acumen Fund
The Acumen Fund is a non-profit organisation which invests in social enterprises, emerging leaders, and breakthrough ideas. According to Vinay’s presentation, the Fund targets business ventures based on several criteria:
  • Potential for large-scale social impact (10x growth or 1M+ customers)
  • World-class team committed to solving problems for the poor
  • Enterprises that have the potential to be financially self-sustaining
  • Potential “game changers” – new global approaches for fighting poverty
Nair’s seminar followed Stephen Kenzie’s presentation, Manager of the UK Secretariat of the United Nations Global Compact. He argued that anecdotal evidence suggests that the Global Compact has led businesses to change their behaviour and has had a positive impact on development. However, this kind of evidence is not necessarily quantifiable.

With 6,953 business participants in 135 countries the Global Compact is the world’s largest corporate citizenship initiative, where all the business have agreed to commit to ten core principles within the areas of human rights, labour, anti-corruption and environment.

Reaching the standard: The Business of measuring and assessing impact
Kenzie introduced the first of this series of IDS Business and Development seminars, Reaching the standard: The business of measuring and assessing impact. There are a multitude of Global Initiatives designed to encourage businesses to behave ethically and sustainably, including the Global Compact, as well as others such as the Ethical Trade Initiative.

In our seminar series, leading thinkers and practitioners in businesses, government and research are outlining their vision of the impact of business in development schemes. Presenters are responding to key questions:
  • Do business and development schemes succeed in making private sector organisations have a more positive impact on development?
  • And also importantly, how can we measure this impact?
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Business and Development Seminar Series
Check out the upcoming Business and Development seminars, with speakers including Helen Wilson, Head of Corporate Social Responsibility at Old Mutual Plc (23 October 2012), and experts on Fairtrade and labour standards.

The Business and Development Seminars take place at the Institute of Development Studies, Brighton, UK and are open to everyone to attend. You can listen to interviews with previous speakers in the seminar series on the IDS website. Please contact Vivienne Benson for further information.

Image credit: Acumen Fund / Flickr

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