In the collective battle to fight problems such as the climate crisis and poverty, we believe in impact management alongside with the male and female entrepreneurs we invest in. This is because, likewise financial and commercial indicators, impact also needs to be backed, measured and managed. If the impact helps the business to have a better performance, its management will allow our portfolio to expand its market value in connection with the real economy.
When impact is treated as part of the core business, managing it is a way to follow up the delivery of its value proposal, as well as supporting risk mitigation and leveraging the commercial strategy.
The main benefit of impact management for business is to understand the value generated for the client and, based on that, gather internal and external efforts to potentialize this value.
Managing the effects of investments in the life of people and of the planet is as indispensable as managing their risk and financial return.
We believe that impact management adds value to the company’s equity, once it generates greater client retention, better brand image and, as a consequence, a more resilient business in the long run, as well as a more attractive investment
Recognizing the multiple dimensions of the impact experienced by people and the planet is the basis for understanding the changes brought about by products and services.
The IMP reached global consensus that impact can be measured across 5 dimensions: what, who, how much, contribution and risk.
Launched in 2016, the Impact Management Project (IMP) is a global initiative that involves more than 2000 players in the value chain, between entrepreneurs, fund managers, investors, and intermediaries. The objective of this initiative is to create a consensus about how we speak, measure, and manage impact. To learn more about the Impact Management Project click on the link: www.impactmanagementproject.com.
VOX Capital collaborated with the IMP in July 2017, holding discussion sessions with entrepreneurs, fund managers, and investors in order to include the vision of Brazilian players in arriving at global consensus.
This will depend on which function each indicator has for you! The most important thing is that they are useful.
At VOX, we combine both types. During the Theory of Change, we define the main indicators linked to the specific outputs and outcomes of the business, and then consolidate these indicators in the 5 IMP dimensions.
For the management of our portfolio at VOX level, we have a standardized indicator: number of people served. We also have standardized indicators at a thematic impact level, for instance, in the Financial Inclusion thesis: number of micro-entrepreneurs who received credit.
Overall, allow comparison between different businesses.
Our advice here is to ensure that the comparison parameters are valid. You can do this by breaking down by industry or impact theme (that old adage: don’t compare apples to oranges).
Another way of using standardized indicators is to monitor the data scope of the investees. For example: the numbers of people served or number of cities served, which we use at VOX.
The IRIS+ platform brings together a catalog of standardized impact indicators, where it is also possible to access sets of metrics by impact theme.
Bring greater precision to the monitoring of the efficiency of the solution.
Our advice is that they should be inserted into the company’s routine. Identify which area within the business is interested in the data. For example: an indicator of improvement in student performance, before and after the use of a given education solution, provides relevant information on the impact performance of the solution, but is also useful for the customer’s area of success, in addition to supporting the commercial area in the attraction of new customers.
Some indicators, such as the NPS, follow a standardized methodology, but the analysis of the result should take into account the industry or segment in question.
