«Technology can create a revolution in the way we can generate impact»

At the meeting, which became a call to action before more than 300 Spanish businessmen and managers, two of the great leaders in the explosion of systemic change participated: Sir Ronald Cohen, known as the ‘father of impact investment’ and president and co-founder of GSG Impact, and Paul Polman, former CEO of Unilever.

In conversation with ABC Empresa, both analyze the keys to achieving the perfect balance between profitability-risk-impact variables, with measurement and technology as key axes. Precisely, as Cohen recalled, this week, the International Foundation for Impact Valuation (IFVI), an independent non-profit organization dedicated to impact accounting, has made public the methodology, models and a database with about 100,000 factors (in 268 locations around the world, measuring 430 different impacts) to value and monetize environmental impact. «A milestone (as highlighted by the organization) that marks a before and after, because it demonstrates that impact accounting is feasible on a large scale, that it is relevant for decision making and that significant progress is being made to expand the way “in which we conceptualize the impact.”

Do, and measure

In this context, Cohen and Polman highlight this increase in the value and influence of impact accounting. And they also influence the importance of advances in measuring and conceptualizing, as in the cases of the so-called ‘Scope 3’ emissions, which come from a company’s value chain: business trips, employee travel, uses of their products, etc. “There will be (Cohen points out) financial tools to analyze the correlations between impact and financial results and if the former improve significantly, the latter will reflect this, as has already happened in some segments of the food industry.”

A challenge for SMEs, which must be adequately informed about innovations related to sustainability. Cohen comments that for SMEs it is essential to “categorize the impact and assign it a number, a value, because, increasingly, their clients will demand that the legislation be complied with.” Polman emphasizes that “90% of the global economy is of ‘SME origin’, which tend to be closer to their communities, closer to the clients they serve, so decision-making is faster. “They have a lot going for them, but what we see in this transition is that they don’t necessarily have the resources and means to keep up with evolving legislation or to put in place all the systems that governments want.” In this scenario, specialists highlight the important role of the United Nations Global Compact (“which has a very active chapter in Spain”) or that of the international chambers of commerce, with initiatives such as the World Business Council for Sustainable Development .

General interest

Regarding the necessary scalability of impact investing, Polman speaks from his own experience: “If you look at Unilever, the company I ran for ten years, if we wanted to move to sustainable tea or sustainable palm oil, we literally had to convert the world, we had to convert the Indonesian government or the Malaysian government, we had to work with tens of thousands of farmers, which takes years, to find solutions. Solutions for a better society with enormous challenges to overcome: «860 million people go to bed hungry every day without knowing if they will wake up the next day, 75% of people live in countries where income inequality has increased and inflation has exceeded their salary increases.

There is (a lot) room for improvement, as Cohen emphasizes: “There is a great change in values ​​in companies and, therefore, in society, which already adopts, for example, consumer decisions based on the company’s responsible compliance.” . Technological progress (AI, big data, etc.) can create a revolution in the way we can generate impact, as well as innovation when it comes to facing the challenges of the 21st century, whether when creating new forms of concrete or creating new platforms to reduce the cost of loans for the poorest. And he adds his experience on the ground: “I invest in early-stage impact companies, so that they do a better job of generating positive impacts on the ground, that they are better placed to provide solutions to the big problems we face. we face.”

Looking ahead to the coming years, both agree that new generations will be more aware (they are already beginning to be) about the importance of the value of social impact versus economic benefit. And of course, companies, as Cohen points out: «Thanks to the new valuation, the new measurement, investors are going to say to companies: ‘you are creating more environmental damage than you are making profits. Your competitor is doing a much better job…’ In this context, Spain has had an impressive evolution and I think that its relationship with Latin America predicts a very promising future for it.

A better future thanks to the involvement of personalities such as Cohen (author of the book ‘Impact. Transform capitalism to achieve change’) and Polman (‘Net Positive. Net Positive Impact: how brave companies prosper by giving more than they receive’ ). From theory to practice, from company to society and, always, with collaboration as the essence of efficiency, as Polman concludes: «Companies must actively participate not only by doing the right things individually, but by working together, including ultimately with governments, to ensure that we have the right systems and frameworks for action.