Jed Emerson at BlendedValue: “…Simply because our present, dominant approaches to assessing metrics fall short of our task—How can one measure the full value of a life saved or possible future changed? What, ultimately, is the real impact and value created through the allocation of our capital?—we persist because we know two things:
First, we know we are on a Hero’s Journey of inquiry and innovation. Too often we forget the present system of tracking financial performance (the basis upon which trillions of dollars flow through global capital markets and the foundation upon which too many of us build our lives) is the outcome of over sixty years of development, refinement and debate. In the U.S., GAAP and FASB (the fundamental building blocks of mainstream business and finance) were not created until after World War II; and it was not until the creation of the Environmental Protection Agency in 1970 that business and many nonprofits began tracking and assessing environmental metrics on a consistent basis. And while social metrics have always been a part of the parlance of government and philanthropic funding, many foundations and social investors have not sought to weave performance assessment into their process of allocating funds until recent decades. It is for these reasons I am quite comfortable with the reality that those creating the metrics and evaluation frameworks of tomorrow will need another twenty years to build what is not yet ours, for I know it will come in good time.
Second, we are creating Total Portfolio Reporting frameworks to track the returns of unified investing strategies (capable of reflecting the aggregate performance of philanthropic, social and environmental value creation) because we know it can be done—and indeed, we see the metrics mist clearing by the year.
As initiatives such as
The Principles for Responsible Investing’s Integrated Reporting work,
the recently re-organized SROI Network,
CapRock’s iPar system,
and a variety of grassroots initiatives coming together around various sets of common reporting for assessing community impact,we find one can create a balance between our aspirations for a better world and the challenges of demarcating our progress toward that goal.
In the end, I hate the whole metrics debate.
It is repetitive, mind numbing and distracting from the critical task of fighting the forces presently destroying our societies and planet. Each time some ignorant (not stupid, mind you, and yet, not fully aware of what they do not know; they are quite rightly, ignorant) newcomer enters the discussion, we’re all expected to re-group and re-define concepts and issues well documented and explored in the past. The continual, mindless reminders that not everything that counts can be counted leave me frustrated and even angry at some who for reasons beyond me don’t seem to understand that such now trite insights were the very starting place of this journey well more than 25 years ago and that, indeed, as newcomers they are as far behind the current exploration as we are from our goal.
Yet, we make progress despite our doubts and complications.
We advance the practice of both impact investing and performance measurement one step forward and two steps back as the current “knowledge” of the crowd actually pulls us backward to previous thinking and practice. And we know the appropriate application of metrics bring meaning and insight just as they demonstrate the limitations of such efforts….(More)”