Tomohiro Nagasaki

I lead Business Call to Action's work on impact measurement of inclusive business.

The success of the SDGs depends on robust impact measurement and data collection

At the United Nations Sustainable Development Summit in September 2015, a set of 17 goals was adopted by world leaders to tackle major global development challenges by 2030. These new Sustainable Development Goals (SDGs) cover a wide range of needs, from ending poverty to promoting gender equality, providing quality education to ensuring access to energy. But how are these goals relevant to business?

Unlike the previous Millennium Development Goals (MDGs), the SDGs call for greater participation from the private sector. This is largely driven by the enormous gap in resources to finance the SDGs, which is estimated at $2.5tn (£1.6tn) per year. It is clear that without the business community’s participation, these goals will not be achieved.

The SDGs also focus on measuring and collecting data. Like any project, a robust monitoring system is needed to track progress towards these 17 goals to ensure they are achieved. The private sector can play an important role in data collection and reporting by measuring its social impact.

Many actors are beginning to collect data on the private sector’s contribution to the SDGs and business is at the heart of this effort. Typically, companies collect and analyse a variety of data related to their operations and finance. Some actually go beyond that and try to understand their social impact.

At BCtA’s 6th Annual Forum in New York, Wolfgang Müller, CFO of Digital Divide Data (DDD), shared the company’s approach to measuring its social impact. DDD delivers high-quality, competitively priced business process outsourcing solutions to clients worldwide. At the same time, DDD’s innovative social model enables youth from poor families to access professional opportunities and earn higher income in countries like Cambodia and Kenya. DDD collects disaggregated data through annual surveys to measure core indicators such as the annual increase in monthly earnings of its graduates. The company also collects qualitative information on how its graduates perceive the value of their work experience at DDD and the higher education they received through its work-study program.

Investors and donors are also drivers of social impact data collection. These organisations are looking for higher-quality data on the social impact of the companies they support. Eriko Ishikawa, global head for inclusive business at the International Finance Corporation (IFC) has stated that IFC’s rigorous system collects quarterly financials as well as data on the social and environmental impact on the companies it invests in. IFC also provides market insights that enable its inclusive business clients to understand the profiles of their suppliers and customers using mobile-data collection, interviews and focus-group discussions to inform business decisions.

International organisations such as the United Nations have the role of coordinating data collection by many stakeholders, including those undertaken by the private sector. They set a common agenda and develop tools for governments, civil society and the private sector to streamline their efforts and focus resources on SDG reporting.

Serge Kapto, policy specialist on data for development at UNDP, explained that the United Nations aims to leverage data to drive better policies for sustainable development. This is a very ambitious task and policymakers are still reviewing the process to ensure the data reporting is as inclusive and accessible as possible to all stakeholders.

“We have to build the framework and the tools for the private sector to be part of the reporting process,” Kapto explained. “Companies have to go beyond their existing monitoring processes to contribute to the SDGs in an integrated and accountable manner – there’s still a lot of work to be done.”

Finally, actors like the Business Call to Action (BCtA) provide capacity development and support to companies in measuring their social impact. For example, BCtA has recently launched the BCtA Impact Measurement Services (BIMS) to assist inclusive businesses in measuring their social impact along with financial and operational performance. Some early insights from BIMS can be found here.

With all these efforts and resources put into data collection and reporting on the SDGs, how can we be sure that they will yield a better understanding of the ways businesses contribute to sustainable development?

“The key to making data collection successful for business is to make it simple,” suggested Ishikawa, “Measuring social impact has to be easy and deliver useful insights for the business so that companies are willing to pay for it.”

Mitesh Thakkar, founding director of Arthify, a technology solutions company that is leading the implementation of BIMS, reiterated the importance of linking data collection to decision-making and concrete action.

“BCtA members are interested in making measurable contributions to sustainable development,” Thakkar said. “To help them achieve this, BIMS takes a customised approach for each company. We help companies develop contextually relevant operations and social impact indicators based on their analyses of market gaps, products and services strategies, and anticipated social impact. We also support BCtA members to operationalise data collection by providing them with mobile-based technology tools for ongoing impact measurements.”

This blog was originally posted on the Guardian Sustainable Business BCtA Partner Zone