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Impact rainbows and Ice cores

How credibly reporting Impact is an opportunity for any business

When it comes to Impact, our story is not a new thing. Humans have been having an impact on the planet since we emerged from the primordial goo and evolved into the land cultivating, animal domesticating, acquisitional beings we are today.  At its core, Impact can be considered as any action or activity that has an effect or influence on something or someone else. Intended or unintended, positive or negative, we can trace human impacts on the planet in the very furthest reaches of the most hostile environments.

Take the Roman Empire. During their expansion throughout Europe and further afield, the Romans were busy smelting silver coins using lead, among other uses, creating enterprise, trade, wealth and war wherever they went. Where they went did not include the glaciers of Greenland yet we can detect significant lead pollution deposits in ice cores from the region corresponding to the years of conquest. And conversely declining lead levels as the Empire collapsed and the lead pollution all but stopped. We can detect the rise and fall of an entire civilisation through the pollution it generated 2,500 years ago and its impact some 3,000 miles away.

In the context of sustainable development for organisations, Impact can be considered as both the potential risks and opportunities for a business and its influence or effect on other stakeholders, including the planet. Put simply, all the external factors that have a role to play in good decision making and all the effects those decisions have on people and planet.

Ultimately, the goal for any business has historically been to mitigate risks and maximise opportunities in order to succeed. That success has traditionally been considered in the eyes of investors and their financial returns but increasingly we are realising that value cannot always be measured in monetary terms. Many things we hold dear or rely upon, our societal ties, families, friendships, health and wellbeing, sense of fairness, nature and ecosystems, all contribute hugely to our lives, but their value is less tangible when we revert to a paradigm of GDP or “the bottom line”. Put another way, not all capital is financial capital.

It is with this premise in mind that “Double Materiality” has risen to the fore in recent years as the guiding principle for understanding and assessing Impact. The concept addresses those inward and outward looking factors, those impacts, or potential impacts, on all stakeholders and across all forms of capital. This concept is now specified in Sustainability standards, such as the European Sustainability Reporting Standard (first reporting period in 2024), and forms the backbone of our work with clients to understand and prioritise their sustainability strategies.

Articulating materiality, and indeed Sustainability more broadly, has stymied attempts by many businesses to make meaningful progress to address the global challenges we all face. Beyond carbon, many leaders struggle to know what to measure, what to do with their data and how to communicate their priorities.

The United Nations Sustainable Development Goals (SDGs), adopted by all UN Member States in 2015, serve as a shared blueprint for peace, prosperity, and sustainability for people and the planet. These 17 goals encompass a wide range of interconnected objectives, aiming to address global challenges and improve the well-being of all individuals.

By analysing double materiality through the lens of the SDGs, we can begin to communicate in a consistent manner. Moreover, we can report on contributions or detriments to these goals knowing there is common understanding and agreement globally on their importance. The magnitude, scale and scope of an impact within a goal can be measured and assessed using real data and the information can be used to make decisions and to credibly communicate impact without fear of greenwashing.

Sounds simple right? So consider this; you are a mining company, you’re supplying copper to the renewable energy sector for wiring and electronic components to accelerate the transition to a low carbon economy. So you are having a positive impact on Climate Action. However, you are also responsible for deforestation and habitat loss. So you are having a negative impact on Life on Land and there is a spillover impact to Climate Action. So which is it, positive or negative? And how do you understand it, report on it, and talk about?

It’s no wonder many businesses are “Green Hushing”. They are simply avoiding talking about Impact and Sustainability altogether. Or perhaps because they are caught in this conundrum between being necessary, yet having obvious negative impacts, sustainability falls into the “too hard” bucket and leaders feel impotent to make meaningful progress.

But trade-offs happen in business all the time. You decline a potentially lucrative new client transaction because the reputation risk is too high, but you reduce your risk and cost to operate by doing so. Or perhaps you pay a living wage to all employees and subsequently you have to increase prices to clients; you risk losing business, but you have lower staff turnover.

Weaving Sustainability into any organisation and aligning to the SDGs is simply an extension of the work leaders do every day to consider material factors and make a decision in the best interests of stakeholders. Yes we have widened the pool of stakeholders and what we consider as material factors but, armed with actionable insights, leaders can feel empowered to make more sustainable decisions and communicate with confidence. Measuring and reporting on Impact as I have outlined it here enables that informed decision-making.

This process can be especially empowering for businesses in “hard to abate” sectors or difficult-to-quantify services sectors. Those where there are obvious negative impacts on one or two particular goals. For example, Banks will struggle to avoid financing some fossil fuel activity right away and trust companies cannot exit all clients who invest in or have a source of wealth from heavy industry. Rather than focussing solely on negative impacts, and I should highlight here that we do still need to understand, measure, report on and attempt to mitigate those negative impacts, the framework of the SDGs allows you to consider the full spectrum of the sustainable development agenda and identify where, at the very core of your business, you are having positive impacts too.

If we revisit our mining example, often considered too reputationally challenging to provide banking or services to, you may have a company deeply committed to its employees that provides the main source of decent work in an area of economic deprivation. Perhaps this business is investing heavily in innovation in order to improve its extraction processes. Or perhaps the minerals it supplies are essential to some critical industries such as steel. Maybe it is an industry leader in the way it manages water resources or is prioritising programmes to keep children at school in the local community to improve their life chances.

Without credible reporting it is hard for a mining company to make any sustainability claims, let alone pursue alignment with the SDGs. It’s also really hard to know what to prioritise; what are the most material impacts and where are the opportunities?

The Impact Rainbow shown here highlights both the positive and negative impacts this company is having. You could probably have identified in advance some of the obvious negative impacts but that only tells half the story, and it doesn’t create a very compelling case for change within the business.

An increase in regulation is coming in this space, both at home and abroad, and with financial capital transferring at pace to millennials and Gen Z, the focus on sustainability and Impact will only intensify. Those companies who can confidently talk about the full spectrum of their impacts and how they are managing them will not only win customers, but they will also find securing capital and retaining talent a more straight forward process.

And if I were a stakeholder of our mining company example, I would be questioning my other investees/potential employers/clients/suppliers/financial services providers about their Impacts because if the “dirtiest” industry can take the plunge to really look hard at their impacts, anyone can.

In partnership with Paragon Impact 

Full Business Brief: Business Brief (

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