Evaluation and Impact Assessment
- Q + A
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Evaluation and Impact Assessment is a guide that forms part of the Social Good Guides, a series of essential small-business guides created to support startup changemakers produced by the Social Innovators Collective. This guide is authored by Andy Fyfe, the Community Development Coordinator for B Lab. In this guide, Andy talks about why evaluating the quality of your company’s services matters, as well as why being able to communicate your company’s impact on society and the environment is important. Some of the insights offered in this guide include an explanation of the difference between a Certified B Corporation and a Benefit Corporation, a description of the B Impact Assessment and how it can be used to transform a company’s claims into proof, and the essential role evaluation and impact assessment plays in convincing investors to provide funding and capital for your startup. When asked at what point during the first twelve months of enterprise building a social entrepreneur should begin thinking about evaluation and impact assessment, Andy answered: “It’s never too early to log in and begin working on the B Impact Assessment. It’s free and a very useful measurement tool.”
The first benefit of going through the B Impact Assessment is that a company will have the ability to measure and identify the areas of impact the company has regarding people and the planet.
Below is an excerpt from the Q + A section of the guide.
The Social Good Guides (SGG): What is the difference between a Certified B Corporation and a Benefit Corporation?
Andy Fyfe (AF) A Certified B Corporation (also referred to as Certified B Corp or shortened to B Corp) is to sustainable business what fair trade certification is to coffee. B Corps are certified by the nonprofit B Lab by meeting rigorous standards of social and environmental performance, accountability, and transparency. B Corps have access to support and a portfolio of services that benefit corporations (legal entities) do not. This certification does not change a company’s corporate structure.
Benefit corporations are the same as any other traditional corporation with the exception of three distinctions:
1. They are purpose-driven.
2. They are accountable to directors, officers, and shareholders.
3. They are transparent by publicly releasing a third-party evaluation.
A benefit corporation must publicly report on non-financial performances using established third-party standards. Benefit corporations are not automatically certified as B Corps and do NOT need to be certified before registering with the state.
SGG: What benefits can a social entrepreneur expect after conducting a thorough evaluation and impact assessment?
AF: The first benefit of going through the assessment is that a company will have the ability to measure and identify the areas of impact the company has regarding people and the planet. An entrepreneur can use the score to compare his or her enterprise to other B Corporations or other users of the B Impact Assessment. The assessment will help to identify areas for improvement (i.e. community, governance, etc.), access better practice guides (i.e. local purchasing policy, setting up an audit committee, etc.), engage employees through the assessment process, attract investment by providing genuine interest in tracking impact, utilize B Lab’s Improve Your Score tool to map out areas of opportunity, and finally pursue B Corp certification.
In a wider view, companies using the assessment further B Lab’s goals of certifying and supporting B Corporations, accelerating the growth of impact investing, and developing supportive public policy innovations.
SGG: Once social entrepreneurs have evaluated the impact their business is having using the B Impact Assessment, what should they do with this information? How can they communicate this knowledge to their customers and investors?
AF: There are many evaluation tools available today for companies to measure their social and/or environmental impact. One great resource is Tools and Resources for Assessing Social Impact (TRASI), a searchable, expert-reviewed database of over 150 approaches to measuring the impact of social programs and investments. However, the B Impact Assessment is a step toward B Corp certification, which is the only company-level certification available. Developing a score on the B Impact Assessment is helpful to create a team-wide discussion about setting social and environmental goals. Additionally, investors are always wondering how your company compares to industry competitors. If you are addressing a need in society or the environment, investors want to know that you are addressing that need effectively and with impact. Using an independent body to measure your performance is the only way to prove your claims. Communicating your score externally to customers is only possible once your company is accredited by B Lab and thus certified as a B Corporation.
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