Better tools for the private sector to measure what matters
Achieving the Sustainable Development Goals (SDGs) by the 2030 target date is an ambitious undertaking. Adopted by United Nations member states in 2015, these 17 environmental, social, economic, justice, and governance-related goals require action from all sectors of society, including the private sector. Many private sector actors have stepped up and are playing a growing role. They are increasingly regarded as key players that can invest in and develop inclusive models with environmental and social benefits. This is a must, given that investments from governments and civil society alone will not be sufficient to achieve the SDGs.
- Private sector action is key to achieving the Sustainable Development Goals (SDGs), including Goal 5 on gender equality.
- Businesses need concrete tools to assess and manage their impact on the SDGs.
- IDRC-supported research is underway to improve how investors and businesses assess and manage their impact on women’s empowerment.
- IDRC also supports collaboration among businesses, investors, researchers, and policymakers to create supportive environments for business models contributing to the SDGs.
But how can businesses and their investors evaluate their efforts and adapt them accordingly? They require tools to assess and improve their contributions towards the SDGs. These impact measurement and management tools can encourage corporations to refine their business models and help investors direct their funds towards enterprises that are achieving a greater social and environmental impact. The same tools can also help consumers make informed choices and guide policymakers who wish to channel these business efforts toward shared public policy objectives.
IDRC is supporting research to enhance the way business impact is measured and managed, to help private businesses make a real difference in the lives of the poor. We bring researchers and business networks together to fine-tune evaluation tools and develop evidence that sheds light on financial, social, and environmental returns.
Embedding gender in business and investment decisions
A key area of focus is gender equality, the fifth SDG, and tools that use a gender lens to assess how business and investments impact the lives of women and girls.
For example, IDRC sponsored the Gender Lens Impact Measurement Fund, a partnership with the Aspen Network of Development Entrepreneurs. The fund awarded grants to six applied research projects that focus on practices, tools, or frameworks to measure and enhance a company’s impact on gender equality and inclusion.
One of these grants brings research to bear on the investment strategy of NESsT, an investor that finances social enterprises in their early stages in various parts of the world. The goal is to assess gender dynamics — and how they intersect with other aspects of identity such as age, ethnicity, ability, or sexual orientation — to better inform NESsT’s investment decisions.
Another grant supports research led by Mennonite Economic Development Associates to pilot a way of measuring the gender impact of small and growing businesses in Central America’s agriculture sector. The team will develop a manual and toolkit to assess gender equality and to identify, implement, and assess strategies to incorporate gender equality goals within the companies.
IDRC-supported research in East Africa and South-East Asia is exploring gender lens investing from the point of view of access to capital for women-led businesses, workplace equity, and products and services that benefit women and girls. The research includes interviews with over 200 women-led enterprises that have benefited from gender lens investment in India, Indonesia, Kenya, and Rwanda, to assess the impact on the lives of women workers, consumers, and suppliers. The findings will inform the design of a toolkit that will help users apply a gender lens when they make investment decisions.
The SDG Action Manager
Measuring SDG impact is also on the agenda of Sistema B, a non-profit leading a movement of B Corporations and community of social entrepreneurs in Latin America. B Corporations, also known as B Corps, are for-profit companies that use business to solve social and environmental problems.
IDRC is supporting Sistema B — together with B Lab, its sister organization that certifies B Corps — to develop the SDG Action Manager, an online platform based on the B Impact Assessment tool. To be launched in 2020, the platform will allow companies around the world to assess, compare, and improve their performance against the SDGs and gain access to online resources and benchmark against key indicators and their peers. An important area of work for the SDG Action Manager is Goal 5 on gender equality and women’s economic empowerment.
The initiative will not only spur action among businesses, it will also help researchers understand how businesses can change their behaviour and work towards achieving all of the SDGs, and gender equality in particular. A research-ready and anonymized dataset on the social, environmental, and SDG performance of businesses will be publicly available in 2020.
Connecting knowledge partners and actors
Business models with environmental and social benefits, including gender lens investing, are expanding, but their proponents need to make the business case to build stronger ecosystems for this kind of private sector activity in developing countries. Public policies can have a significant impact on private-sector contributions to the SDGs. Sustainable and inclusive public procurement systems, for example, can be an important driver for social enterprises and small and growing businesses, especially those led by women.
IDRC contributes to this effort by fostering dialogue among investors, corporations, policymakers, researchers, and others to further women’s empowerment and help achieve the SDGs by 2030. More collaboration is needed to share knowledge, develop and pilot potential solutions, and scale successful initiatives.