According to the United Nations Conference on Trade and Development (UNCTAD), achieving the Sustainable Development Goals (SDGs) will require to invest between US$5 to $7 trillion by2030. This is a daunting task in terms of resource mobilization. It is also a huge challenge – and a great opportunity – in terms of resource allocation.
A major role for the private sector
Indeed, we need to make sure that we allocate whatever money will be raised where it really helps. That seems trivial, but it is in fact quite complicated to accurately assess the deep, long-term effects that many of these investments will have on the environment and society.
In practice, a large part of these investments will be made through private companies. Indeed, almost everything that we produce and consume is made by companies. They are the ones that grow our food, make our medicines, build our infrastructures and develop our technologies. They are the real operating agents of our societies that will implement on the ground most of the initiatives related to the SDGs.
It is therefore crucial to correctly and thoroughly assess the impact that companies have on each SDG if we want to make sure the investments we make really go in the right direction. Without robust tools to measure impact, we might very well end-up financing models that create more problems than they bring solutions.
Innovative ways of measuring impact
So how do we measure impact?
Usually, we ask experts to tell us but at Impaakt, we do not believe this is the right approach. Indeed, we don’t think there is any single person (or small group of people) on earth that can really look at the many forms the impact of a company like Alphabet (Google) can take for different communities, in different countries and with different time horizons. It is far too complex for a single brain to figure this out.
Another route would be to rely on technology. Many interesting models based on Artificial Intelligence (AI) and Machine Learning have developed recently. Although they are interesting and could help us streamline the process, we believe it will take years – if not decades – before systems based on AI can really manage this task. Not because technology is not good enough, rather because there is not enough impact data available out there for these models to crunch and deliver standardized impact metrics.
In fact, we believe the most promising way of correctly – and quickly! The clock is ticking – measuring the impact of business, is to rely on collective intelligence. If we can pick the brain of thousands of people, capture the small pieces of knowledge they have on the impact of each company and consolidate all this information in a structured way, imagine how powerful this would be!
The power of collective intelligence
The power of collective intelligence is well known. There is not only considerable academic literature on the mechanisms that allow collective intelligence to over-perform expert-based models; there are also well-known platforms that have proven it is possible to generate high-quality information by asking potentially anyone to participate. In fact, many scientific research projects have used collective intelligence to collect and even analyze data. This approach known as “Citizen Science” is a good illustration of the level of quality you can get if you gather a large-enough (and diverse-enough) community of participants.
Of course, collective intelligence is not magic. For this approach to work, you need to design proper incentive and quality mechanisms that avoid the risks of pollution, manipulation or distortion of data. If you get it right, you can definitely create highly valuable materials that experts alone are unable to produce.
This is exactly what Impaakt does: a collaborative platform that uses collective intelligence to produce impact analysis and impact ratings on each SDG of the world’s largest companies.
Because there is only one way to achieve the SDGs: do it together!
Co-Founder and CEO at Impaakt
Head of Impact Office, Lombard Odier Investment Managers