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Is real impact outcome (RIO) the next KPI?

April 28, 2022

Image: Cecilia Repinski, Founder Green Assets Wallet, Maria Svantemark, CEO & Co-Founder SustainLab, Karin Björk, Sustainable Lead Grant Thornton, Ulrika Renstad, Head of Business Development-Nordic, Global Listing Services, Nasdaq

How can we measure true impact?

As Åre Business Forum wrapped up, its last participants were seen taking a final run down the glistening slopes of Sweden’s most popular ski resort Åre.

The Nordic counterpart to the World Economic Forum in Davos, Åre’s Business Forum, now running in its 12th year, has become one of Sweden’s most popular arenas for innovators, entrepreneurs, investors, and decision makers.

From 30th March to 1st April 2022, the program combined winter sports, inspirational talks, panel discussions, and networking events such as start-up competitions and the national forum for female business leaders led by Deloitte’s Women In Network (WIN). More than 60% of Sweden’s leading figures in business and politics join Åre every year.

The second day of the program was reserved for impact-entrepreneurs, those that innovate and strive for real and sustainable change. This ‘Impact Summit’ included a high-level panel to discuss how to measure real impact. What are the key performance indicators (KPIs) that mirror the creation of real value and impact in the world?

20220330 Skiers Hütte Åre Impact Summit: Rundabordssamtal Skiers Hütte

It may be time to introduce the KPI ‘Real impact Outcome’ (ROI).

Cecilia Repinski CEO & Founder, Green Assets Wallet

KPIs that measure true impact

Our CEO and Founder Cecilia Repinski, together with Karin Björk from Grant Thornton Sweden, Maria Svantemark as CEO of SustainLab and Ulrika Renstad, Head of Business Development-Nordic at Nasdaq lead the discussion around impact and data on ESG (Environmental, Social and Governance). ESG are the three categories, investors deem responsible values in terms of impact.

According to the Global Sustainable Investment Alliance, ESG-oriented investing is rising at breakneck speed with global sustainable investment topping $30 trillion today (an increase of almost 70% since 2014). But does a strong ESG-proposition automatically create value?

Regulatory and investor pressure have been mounting to provide better and clearer information about the sustainability of corporate activities and investments.

Future impact reporting requires delivering impact intelligence data to showcase progress, include targets, measure sustainability risks, and detail the company’s overall sustainability impact.

Cecilia Repinski CEO & Founder, Green Assets Wallet

ESG data versus impact data

As Cecilia puts it, ESG-data and impact data are not the same. Both however need huge improvements in terms of standardization, harmonization and automation.Cecilia described the three trends she currently sees emerging in the market of sustainable investments:

1) We have reached a level of understanding beyond ESG scores. Investors want quantifiable KPIs.
2) Investors’ demands are more sophisticated than ever before in terms of what can be considered credible enough impact.
3) The trend is moving away from labels towards impact performance. Investors will not only ask for risk-profit assessments and KPIs such Return on Investment (ROI), they equally wish to measure real impact outcome.

Future impact reporting requires delivering impact intelligence data that does so much more than what the market delivers today. It needs to showcase progress, include targets, measure sustainability risks, and detail the company’s overall sustainability impact. All while being compliant with sustainability regulation.

Without governance you cannot efficiently deliver on impact KPIs.

Karin Björk Sustainability Specialist, Grant Thornton Sweden

Governance, the third category and probably the softest one in terms of data is of absolute essence. “Without governance you cannot efficiently deliver on impact KPIs,” explained Karin Björk, Sustainability Specialist at Grant Thornton Sweden, a leading assurance company. Embedding sustainability into a company’s system of practices is important to help future-proof operations.

Maria Svantemark, CEO at SustainLab, a Sustainability Management platform for corporates, emphasized in the panel that the market needs to treat sustainability data with the same scrutiny as financial data. No one would accept having turnover numbers emailed to them, as one does now with sustainability data!”

 

No one would accept having turnover numbers emailed to them, as one does now with sustainability data.

Maria Svantemark CEO, SustainLab

With greenwashing on the rise, regulators have intensified their scrutiny on ESG criteria. There is mounting pressure on investors to show that their investment strategies go beyond a branding exercise. This will also hopefully improve industry-wide comparability and transparency as well as drive sustainable transformation in the financial markets.

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