When all the UN Member States adopted the Sustainable Development Goals in 2015, this marked the beginning of a journey aiming to unite all actors under the same umbrella in driving an equitable future for all, enabling thriving economies and living in harmony with the environment.
Ever since, sustainability has started to be more and more under the spotlight: governments are integrating it into their agendas, academia is embedding it in educational curriculum, and consumers are more conscious in their choices. Over the past year, we have also witnessed a steady growth at a global level in sustainability commitments made by business leaders, in the social enterprise ecosystem, and in impact investment.
With this, impact is quickly becoming a buzzword in demonstrating the value generated by organizations across all sectors and industries, beyond the economic returns, through the lens of social and environmental indicators of performance. However, as traditionally impact was attributed to the non-profit sector, as opposed to the financial focus of businesses, and as sustainability is often associated with environmental impact, or at the completely opposite pole to financial sustainability, the impact space is overwhelming and confusing. Let’s look at how impact can enable business performance.
What does impact mean?
Before delving into the topic, it is important to establish how impact can be defined in a business context. If we take the dictionary definition, impact represents the effect or influence of an action, which for an organization can be extrapolated to a change generated by its model, be it through the solution it brings to the market, within its supply chain, or inside the organization. Impact goes beyond the immediate outputs of activity, and so, the process of quantifying it can be complex and challenging. However, if we frame impact in the current context of the Sustainable Development Goals, this enables organizations to speak in a universal language, and empowers them to become agents of change.