The Editors' Post: Can impact measurement win the race against greenwashing?
As concerns over greenwashing grow, the impact measurement industry is booming. But it's still paralysed by fundamental questions. This week's view from the Pioneers Post newsroom.
Impact measurement and management has become a fully-fledged sector, worth no less than US$7.6bn a year, we learn in a report published yesterday. It is the first study of the impact measurement and management industry, researchers claim, and it reveals exploding demand from companies, NGOs, governments and others looking for help to measure and report on their social and environmental impact. And it shows no sign of slowing down: researchers estimate that more than US$30bn will be spent globally on impact management services each year by 2030.
Impact measurement is seen by many people as the antidote to greenwashing (or impact- or social-washing, whichever you choose); so as concerns soar over misleading impact claims made by companies, investors or others, it is no surprise to see that impact management and measurement is a growing industry.
But, as the authors of the report point out, it’s a bit all over the place: “Everybody is trying to jump onto the bandwagon”. From mainstream rating agencies and consultancy firms to hyper-specialised impact measurement companies, demand is met with a “flurry of solutions” which can be inconsistent and even contradictory. As a result, one could even argue that impact measurement could be perversely used as a means of greenwashing – pick the standard or methodology or index that shows you in your best light and your impact report will be glowing. Standardisation will be essential to create a credible, level playing field.
However, others warn that standardisation and harmonisation risk lowering the accuracy of impact reporting – moving the focus towards compliance with a set of rules, instead of seeking the best insight into impact possible: a diversity of approaches is necessary to provide impact data that reflects reality. We need harmonisation to create credibility; yet diversity to ensure accuracy: how do we square that circle?
In an opinion piece this week, Nigel Ball and Gen Maitland Hudson have a provocative answer to this question: for impact investors, “actually what you need is credibility, not truth”, they write. As long as investors keep things in-house, they can be accused of cooking up the numbers the way they like; what we need is third-party certification – the only way of giving impact measurement the legitimacy it needs, our contributors argue.
Agree, disagree? Tell me what you think. Impact measurement and management may be booming, but it's still paralysed by fundamental questions. Can it win the race against greenwashing?
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This week’s top stories:
300% growth predicted for US$8bn impact measurement and management industry by 2030 – new report
Photo credit: Freepik.
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