As the global business landscape continues to evolve, startups must position themselves as impact leaders to stay relevant and attract socially responsible investors. To achieve this, they need to adopt and implement impact measurement frameworks that align with the growing focus on Environmental, Social, and Governance (ESG), sustainability, and the United Nations Sustainable Development Goals (SDGs).
In this article, we will explore seven impact measurement frameworks for startups and share the success stories of ten companies that have successfully measured their impact. We’ll also discuss how NFTs and blockchain technology can be applied to enhance impact measurement and how Omdena can help your organization become an impact leader.
1. B Impact Assessment (BIA)
The BIA framework, developed by the non-profit B Lab, is a comprehensive tool that assesses a company’s impact on its workers, community, environment, and customers. By benchmarking performance against best practices, startups can gain insights into areas for improvement and demonstrate their commitment to ESG, sustainability, and SDGs.
Ecolife Recycling, by using the BIA framework, evaluates its performance across five key impact areas: governance, workers, community, environment, and customers. For example, the company might assess its greenhouse gas emissions reduction and share that it has successfully diverted over 50,000 pounds of electronic waste from landfills through its recycling programs.
2. Global Impact Investing Rating System (GIIRS)
GIIRS is an impact measurement tool that evaluates a company’s social and environmental performance. It provides a standardized framework for comparing impact across companies, enabling startups to attract socially responsible investors by showcasing their impact leadership.
Angaza, through the GIIRS framework, measures and reports its impact across several categories such as energy access, job creation, and affordability. For instance, Angaza might share that it has provided clean energy access to over 1 million people and created 3,000+ jobs in off-grid communities.
3. Social Return on Investment (SROI)
SROI is a framework that helps startups quantify and communicate their social value creation. By measuring the financial, social, and environmental returns on investment, startups can demonstrate their alignment with ESG principles and the SDGs, attracting impact-focused investors.
Dimagi, by using the SROI framework, calculates the social value generated by its mobile applications in terms of improved healthcare outcomes. For example, Dimagi could report that for every $1 invested in their health-focused mobile app, $4 worth of social value is generated in terms of reduced healthcare costs, increased productivity, and improved patient well-being.
4. Sustainable Accounting Standards Board (SASB)
SASB offers industry-specific standards for measuring, managing, and reporting on sustainability issues. By adopting these standards, startups can enhance transparency and demonstrate their commitment to addressing ESG and sustainability concerns.
Bluon Energy, following SASB’s industry-specific standards, reports on its sustainability performance by disclosing metrics such as energy and water consumption, greenhouse gas emissions, and waste generation. Bluon might reveal that its energy-efficient HVAC solutions have resulted in a 20% reduction in energy consumption and a 15% decrease in greenhouse gas emissions for its clients.
5. The Global Reporting Initiative (GRI)
GRI is a widely recognized framework for sustainability reporting. By adhering to GRI standards, startups can communicate their impact on critical economic, environmental, and social issues, positioning themselves as impact leaders and attracting socially responsible investors.
For example, Solexel, by adhering to GRI standards, communicates its commitment to renewable energy and addresses environmental and social issues through various metrics, such as energy production, CO2 emissions reduction, and job creation. Solexel could share that its high-efficiency solar cells have generated 50 MW of clean energy and resulted in a 30% reduction in CO2 emissions compared to conventional solar cells.
6. The role of AI on Impact Measurement
AI can help organizations measure their impact by providing insights, automating processes, and enhancing decision-making in various ways:
- Data analysis and interpretation: AI can process and analyze vast amounts of structured and unstructured data from multiple sources, such as customer feedback, social media, and public records. This helps organizations identify trends, patterns, and relationships that may be difficult to discern manually, providing valuable insights into their impact.
- Natural language processing (NLP): AI-driven NLP techniques can analyze textual data, such as news articles, social media posts, and stakeholder communications, to gauge sentiment, identify relevant topics, and measure the effectiveness of an organization’s messaging and initiatives.
- Computer vision: AI-powered computer vision can analyze images and videos to monitor physical changes in the environment or assess the success of infrastructure projects. For example, satellite imagery can be used to track deforestation, urbanization, and land use changes, providing insights into an organization’s environmental impact.
- Predictive analytics: AI can help organizations forecast future outcomes and trends based on historical data, allowing them to make informed decisions and allocate resources more effectively to maximize their impact.
- Automation: AI can automate routine tasks, such as data collection and reporting, allowing organizations to focus on more strategic and high-impact activities. This not only increases efficiency but also reduces the likelihood of errors in impact measurement.
- Benchmarking and comparison: AI can assist organizations in benchmarking their performance against competitors or industry standards, enabling them to identify gaps, set targets, and track progress toward their impact goals.
- Customized impact measurement frameworks: AI can help organizations develop and refine impact measurement frameworks tailored to their specific needs and goals. By leveraging machine learning algorithms, organizations can continuously improve their impact measurement practices and adapt to evolving circumstances.
Some case studies:
Monitoring reforestation success using machine learning
In collaboration with the Madagascar-based startup Bôndy, the Omdena team of engineers developed a machine-learning model to detect tree patches and estimate the number of trees. The project aimed to create innovative reforestation solutions with significant social and environmental impacts. The team used satellite data, drone imagery, and field data to monitor reforestation success, and conducted a comparative case study to evaluate the effectiveness of using machine learning techniques.
Check out the case study on Omdena’s blog for more details on how machine learning can be used to monitor reforestation efforts:
Monitoring human rights abuses through natural language processing
The Omdena team collaborated with the non-profit organization Human Rights First to build an MVP monitoring tool for human rights abuses. In a two-month challenge, the team prepared annotated social media datasets and solved related classification problems using natural language processing (NLP) models. The team built a dashboard Streamlit app deployed on AWS to identify, visualize, and summarize human rights abuses related to war crimes based on severity score and location. The project demonstrates the power of NLP and machine learning in creating an instant monitoring system for human rights abuses.
Check out the case study on Omdena’s blog for more details on this exciting project:
Monitoring and predicting air quality using machine learning
The Omdena Mumbai, India Chapter initiated a project to monitor and predict air quality in India, a major environmental risk responsible for 7 million premature deaths globally every year. The project aims to promote clean energy, and safe transport, enforce stricter vehicle emissions standards, and educate health professionals about air pollution. The project also seeks to improve waste management, reduce activities contributing to air pollution, and implement national air quality standards based on the latest WHO guidelines.
Check out Omdena’s project page for more information:
By harnessing the power of AI, organizations can measure their impact more accurately, efficiently, and comprehensively, leading to more effective strategies, better resource allocation, and ultimately, a more significant positive impact on society and the environment.
Here are 10 AI-driven companies from the Seed stage to Series B, which are also measuring and tracking their impact in innovative ways:
1. Zipline (Series B)
Zipline uses AI-powered drones to deliver medical supplies and blood to remote areas. They measure their impact by tracking the number of lives saved and the accessibility of healthcare in hard-to-reach locations.
2. FREDsense Technologies (Seed stage)
FREDsense Technologies combines AI with biosensors to create portable water monitoring solutions. They measure their impact by tracking improvements in water quality and the reduction of pollution-related health issues.
3. Gro Intelligence (Series B)
Gro Intelligence leverages AI to analyze and predict agricultural trends, helping optimize food production and minimize waste. They track their impact through increased agricultural efficiency, reduced food shortages, and improved food security.
4. Aclima (Series B)
Aclima uses AI and IoT technology to measure and analyze air quality in urban environments. Their impact is measured by tracking air quality improvements and policy changes, promoting healthier communities, and reducing pollution-related health risks.
5. Cloud to Street (Seed stage)
Cloud to Street uses AI and satellite data to monitor and predict flood risks. They measure their impact by tracking the number of people and assets protected from floods and the effectiveness of disaster response efforts.
6. Pachama (Series A)
Pachama combines AI, satellite imagery, and IoT sensors to monitor and protect forests, aiming to combat climate change through reforestation efforts. They track their impact by measuring the amount of carbon sequestered and the extent of forest conservation.
7. ClimaCell (Series B)
ClimaCell uses AI to provide hyperlocal weather data and predictions, helping businesses, governments, and individuals make better decisions. They measure their impact by tracking the reduction in weather-related risks and improving the efficiency of various industries.
8. Bioelektra Group (Series A)
This company uses AI-driven technology to process and recycle waste efficiently. They track their impact through waste reduction, the creation of renewable energy sources, and reduced greenhouse gas emissions.
9. CarbonCure Technologies (Series B)
CarbonCure’s AI-driven solution injects CO2 into concrete, effectively sequestering carbon and reducing emissions. They measure their impact through the amount of CO2 sequestered and the promotion of sustainable construction practices.
10. KONUX (Series B)
KONUX leverages AI to optimize railway maintenance and improve transportation efficiency. They measure their impact by tracking improvements in railway safety, reduced maintenance costs, and increased transportation efficiency.
7. Blockchain, NFTs, and Impact Measurement
Blockchain and NFTs can significantly enhance traditional impact measurement frameworks by providing secure, tamper-proof data storage, and real-time accessibility. By tokenizing specific impact achievements and ratings, NFTs enable transparent and verifiable records of a company’s social and environmental performance. These advancements streamline the assessment process, making it more efficient and secure for both startups and investors, ultimately improving the overall impact measurement ecosystem.
- Tamper-proof records: Blockchain technology provides a decentralized and immutable ledger that securely stores information about an organization’s initiatives and impact. This creates a tamper-proof record that can be easily audited and verified by stakeholders, ensuring the accuracy and reliability of impact data.
- Enhanced transparency: Blockchain-based systems enable real-time tracking and sharing of impact data, promoting transparency and trust among stakeholders. This can help organizations demonstrate their commitment to social and environmental responsibility and attract socially responsible investors.
- Tokenization of impact: NFTs can be used to tokenize an organization’s impact achievements, such as carbon credits or social impact bonds. These unique, tradeable digital assets can be bought, sold, or exchanged, incentivizing impact-focused business practices and creating a market for impact investments.
- Supply chain traceability: Blockchain technology can help track the origin and journey of products and materials throughout the supply chain, ensuring ethical sourcing, fair labor practices, and environmental responsibility. This provides organizations and consumers with increased visibility into the impact of their purchasing decisions.
- Smart contracts for impact verification: Blockchain-enabled smart contracts can automatically verify the completion of specific impact-related milestones or requirements. This reduces the need for manual intervention and streamlines the process of impact measurement, reporting, and verification.
- Cross-organizational collaboration: Blockchain technology facilitates collaboration between organizations, governments, and other stakeholders by providing a secure and transparent platform for sharing impact data. This can help create a more comprehensive and unified approach to measuring and tracking impact across sectors and industries.
CarbonChain is a platform that uses blockchain technology to tokenize carbon credits as NFTs, creating a transparent and secure marketplace for trading and offsetting emissions. By tracking carbon credits and their associated impact on a blockchain, CarbonChain helps companies measure and manage their environmental footprint.
Verra is a non-profit organization that issues Verified Carbon Units (VCUs) for various carbon offset projects. They are working on integrating blockchain technology and NFTs to ensure the transparency, traceability, and accountability of carbon credit transactions, making it easier for companies to measure their impact on climate change.
Conste11ation is a platform that combines NFTs with impact investing by tokenizing social and environmental projects. By converting real-world impact into tradable digital assets, Conste11ation enables investors to track the performance and impact of their investments, promoting transparency and accountability.
Aerial is a company that leverages blockchain technology and NFTs to create an ecosystem for the monetization and trading of carbon offsets, renewable energy certificates, and other environmental assets. This system allows organizations to measure and track their impact, ensuring the credibility and transparency of their sustainability efforts.
5. ixo Foundation
The ixo Foundation is developing a blockchain-based protocol for the creation, exchange, and verification of impact data. They use NFTs to tokenize impact claims, enabling organizations to trade and invest in projects with measurable social and environmental outcomes. This approach helps companies track their impact, foster accountability, and promote sustainable practices.
Provenance is a platform that utilizes blockchain technology to provide supply chain transparency, enabling businesses to track and verify the origins and ethical claims of products. By promoting responsible sourcing, Provenance helps companies measure and improve their environmental and social impact.
Circulor uses blockchain technology to track and trace raw materials, focusing on responsible sourcing and supply chain sustainability. They help businesses identify and eliminate issues such as forced labor, conflict minerals, and environmentally harmful practices, enabling them to measure and enhance their impact.
Nori is a blockchain-based marketplace for carbon removal, allowing companies to purchase carbon credits to offset their emissions. By utilizing blockchain technology to ensure the transparency and accuracy of carbon credit transactions, Nori helps businesses measure and reduce their environmental impact.
9. Energy Web Foundation (EWF)
EWF is a non-profit organization that develops open-source, blockchain-based solutions for the energy sector. Their platform enables the tracking of renewable energy generation and consumption, helping organizations to measure their progress towards sustainability goals and reduce their carbon footprint.
10. Plastic Bank
Plastic Bank is a social enterprise that uses blockchain technology to incentivize the collection of plastic waste in developing countries. By tokenizing the value of collected plastic, Plastic Bank enables individuals to exchange plastic waste for goods, services, or digital tokens. The platform helps companies measure their impact on plastic pollution reduction and supports the transition toward a circular economy.
These companies demonstrate how blockchain-based technology and NFTs can be utilized to measure and track real-world impact, providing increased transparency, accountability, and efficiency in the management of social and environmental initiatives.
Omdena and Impact Leadership
Omdena is a platform that can help your organization position itself as an impact leader by harnessing the power of collaborative AI projects. Through its innovative approach, Omdena has partnered with global organizations to drive positive change across various sectors, as showcased on their “Impact World Leaders”