The EIF's impact methodology for social impact

Summary

The video script explores the possibility of businesses achieving both positive societal impact and financial success. It emphasizes that when a company's intention to create a positive impact is as strong as its intention to profit and scale, these goals can be harmonized. The script introduces an impact methodology that helps measure and reward positive change across various industries. It outlines three key steps for a social impact company to ensure their impact is measurable and rewarded: defining impact indicators, setting targets, and prioritizing their importance. The video also highlights the role of impact funds in monitoring progress and aligning financial rewards with the success of their investments, advocating for incentivizing impact at all levels to ensure sustainable and tangible change.

Takeaways

• 💡 Companies can be both impactful and financially successful if creating positive change is as important as profitability and growth.
• 📈 Measuring a company's positive impact is crucial for assessing its value and success.
• 🌍 The impact methodology helps in investing across Europe, focusing on social and environmental changes in various industries.
• 🍎 An example given is a food sharing app that reduces waste and fosters community, illustrating how social impact can be created.
• 📊 To ensure measurable impact, a company should define clear impact indicators, such as user engagement and food saved.
• 🎯 Setting absolute targets is a key step for a social impact company to measure its success and societal impact.
• 🔍 Impact accountability extends to investors, who are also monitored to ensure their financial rewards align with the success of their portfolio.
• 💼 Investors are incentivized to ensure impact at all levels of the investment journey, promoting tangible and sustainable change.
• 🏆 The script emphasizes the importance of rewarding those who make a positive difference in the world through their business endeavors.
• 🔗 There's an implied connection between measuring impact and the potential for financial reward, suggesting a symbiotic relationship between doing good and making money.

Q & A

What is the core belief of the company mentioned in the script?

The core belief of the company is that a business can be both financially successful and generate a positive impact on the world, as long as the intention to create a positive impact is as important as the intention to be profitable and scale.

How does the company approach the challenge of measuring the 'doing good' aspect of their business?

The company uses an impact methodology to measure and reward positive change, whether social or environmental, across a wide range of industries.

What is the role of impact funds in the company's strategy?

Impact funds invest across Europe to measure and reward positive change. They are also held accountable for the progress of their investee companies, ensuring that their financial reward is directly proportionate to the success of their portfolio.

Can you provide an example of a social impact company mentioned in the script?

An example given is a food sharing app that helps neighborhoods cut down on waste while creating a sense of community.

What are the three key steps a social impact company should take to ensure their positive impact can be measured and rewarded?

The three key steps are: 1) Define their impact indicators, such as the number of active users and food sharing interactions. 2) Set an absolute target for their impact. 3) Establish the relative importance of their impact.

How does the company ensure that the impact funds are also accountable for the success of their investments?

The company monitors the progress of the impact funds as well as that of their investee companies, aligning the financial reward of the funds with the success of their portfolio.

What is the importance of incentivizing impact at all levels of an investment journey according to the script?

Incentivizing impact at all levels ensures that real, tangible, and sustainable impact can be achieved, and those making a positive difference in the world are rewarded.

What is the significance of defining impact indicators for a social impact company?

Defining impact indicators is crucial as it helps quantify the positive change the company is making, such as the number of people using the app or the amount of food saved, which can then be measured and rewarded.

How does setting an absolute target contribute to the success of a social impact company?

Setting an absolute target provides a clear goal for the company to strive towards, which can help in planning, resource allocation, and measuring the success of their impact initiatives.

What does the script suggest about the relationship between financial success and positive impact?

The script suggests that financial success and positive impact can go hand in hand when both are given equal importance in the company's intentions and strategies.

How does the script emphasize the importance of accountability in the impact investment process?

The script emphasizes accountability by highlighting the role of impact funds in monitoring the progress of investee companies and aligning their financial rewards with the success of their impact initiatives.