NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, July 31, 2008

Business knows that “what gets measured gets done.” In this spirit, the World Business Council for Sustainable Development (WBCSD) launches the Measuring Impact Framework to help companies measure and assess the impact of their business activities on economic and broader development goals wherever they operate.

The Framework includes 3 components:

• Business case for measuring impacts entitled “Beyond the bottom line”, highlighting the experience of several WBCSD member companies
• 4-step methodology to identify, measure, assess and manage impacts
• Excel-based user guide that helps companies carry out an assessment

Key features of the Framework include:

• Built by business for business – reflects the collaborative work of over 25 multinational companies over a 2-year period
• Grounded in what business does – based around activities and processes that companies do every day
• Moves beyond compliance – attempts to answer questions about what business contributes beyond traditional reporting
• Encourages stakeholder engagement – supports open dialogue with stakeholders to create a shared understanding of business impacts and societal needs, and to explore what business can and cannot do to address these needs
• Flexible – designed for any business and/or industry at any stage in its business cycle, operating anywhere in the world
• Complements existing tools – makes use of what is already out there (for example, the Global Reporting Initiative and International Finance Corporation (IFC) Performance Standards)
• Externally reviewed – reviewed by more than 15 stakeholders, ranging from non-governmental organizations to academia and government, including Oxfam, World Resources Institute, IFC and Harvard University

“At the WBCSD we believe that business cannot succeed in societies that fail,” says WBCSD President Bj?rn Stigson. “This Framework will help companies to better understand their societal contribution and to look for actions that they can take – alone or with others – to improve the outlook for a sustainable world.”

The IFC collaborated with the WBCSD on the development and application of the Framework, offering their wealth of experience and expertise in results measurement and development effectiveness.

At the WBCSD Framework launch event, Sujata Lamba, senior manager of the IFC Global Linkages unit, said, “Building businesses that are truly inclusive, benefiting both business and society, is not easy and it requires a measure of success that can be tracked over time. As such there has been a call for more systematic ways to assess the value that businesses bring to the communities in which they operate, and it is as a response to these calls that we collaborated with the WBCSD to develop this measurement tool.”