The Sustainable Leading Edge: A Discussion with Sonja Haut
Webcast
Join us for a discussion on sustainability with Sonja Haut, Head of Impact Valuation at Novartis.
In this episode of The Sustainable Leading Edge podcast, FigBytes Head of Sustainability, Kate Cacciatore, talks with Sonja Haut, Head of Impact Valuation at Novartis to discuss the story of her journey into the field of Impact Valuation within Novartis, building on her background as a mathematician, her professional roles in IT and Accounting and much more.
Sonja is the author of the new book, The Case for Impact: A Guide to Creating Value in a World of Social and Environmental Challenges, which has been described as a “clarion call for the adoption of impact measurement” and “an essential guide for those who want to understand the importance of impact in staying ahead of the curve”. Sonja’s pioneering work in the practice of impact valuation is immensely valuable to the field of Sustainability and to anyone seeking to learn about the state of the art when it comes to turning an organization’s purpose and its desire for positive impact into reality.
Each episode of The Sustainable Leading Edge podcast, we invite different business, sustainability, civil society and public sector leaders to share their experience on the leading edge of the sustainability transition.
| Kate Cacciatore | Hello and welcome to The Sustainable Leading Edge. I’m Kate Cacciatore, head of Sustainability at FigBytes, the sustainability data management platform that connects data with purpose. Before I introduce you to my guest today, here’s some context about the purpose of this podcast series and some of the questions and themes it sets out to explore as we face major global challenges, such as the effects of climate change. |
| Kate Cacciatore | Water shortages and biodiversity loss. In addition to social inequalities, conflict and threats to food security, there is growing awareness today across all stakeholder groups that business with its global clout has to do more than incrementally improve its sustainability performance. The systemic changes that are needed to help us shift to a net positive, regenerative, inclusive economy and society are massive. |
| Kate Cacciatore | They will require unprecedented collaborative efforts of the private and public sectors of civil society and citizens to find new business and consumption models, innovative products and services, groundbreaking policies, financing mechanisms and partnerships. This podcast invites business, sustainability, civil society and public sector leaders to share their experience on the leading edge of the sustainability transition. What motivates them to act and innovate in this space? |
| Kate Cacciatore | What is their vision and how are they working towards it? What have they learned about what works and what is holding us back? How do they stay strong and resilient when faced with adversity? And what kind of mindset shift do they think will be necessary to bring about the changes we want to see in the world? Today for this third episode of the podcast. |
| Kate Cacciatore | It’s my great pleasure to welcome Sonja Haut, head of Impact Valuation at the multinational pharmaceutical company Novartis, which has its headquarters in Basel, Switzerland. Sonia is the author of the new book The Case for Impact A Guide to Creating Value in a World of Social and Environmental Challenges, which has been described as a clarion call for the adoption of impact measurement and an essential guide for those who want to understand the importance of impact and staying ahead of the curve. |
| Kate Cacciatore | Sonia is pioneering work in the practice of impact valuation is immensely valuable to the field of sustainability and to anyone seeking to learn about the state of the art When it comes to turning an organization’s purpose and its desire for positive impact into reality. So, Sonja welcome and thank you for being my guest today on the podcast and exploring the leading edge of the sustainable transition with me. |
| Sonja Haut | Thanks, Kate, for having me. Such a pleasure to be here with you. Wonderful. |
| Kate Cacciatore | So I guess it would be lovely to start with a little bit of context about your role in Novartis and what impact evaluation means. |
| Sonja Haut | Yeah. Novartis is a large pharmaceutical company headquartered in Basel, Switzerland, with around about 100,000 employees. And our fields of medicines cover cardiovascular disease, oncology, gene therapies. And the yeah, the purpose of the company is really strong and engaging. It’s about we’re reimagining medicines to extend and improve people’s lives and I have the pleasure to have impact valuation there. |
| Sonja Haut |
It’s a practice that started some seven and a half years back and the role belongs to the accounting department. |
| Kate Cacciatore | Fantastic. I think what’s interesting about your career journey is that compared to maybe some people who may have done sustainability throughout their career, you started in I.T. and Finance, if I remember correctly. So I’m particularly interested to hear about the journey and how you discovered impact valuation. What led you to that in particular for anybody who might be in a finance role in a company and looking to see how they could also connect with the areas of sustainability and impact? |
| Sonja Haut | Yeah, indeed. IT were the starts. I’m I’m a mathematician and at the end of my studies I had seen sufficient abstraction to have a develop the want for something tangible and applicable. So the moving to IT felt, felt natural and into business sense within the artists. I had worked with information flows and processes on on one of their global projects early on, which brought me closer closer to finance. |
| Sonja Haut | So by the time I had completed my MBA with IMD. I was mature to be adopted by by group finance. So this this is how that has come about. And then it was, if you wish, a topic of well, allow me to say here a coincidence that certain questions from the external world had just amassed to the extent that there were more and more inquiries on so-called non financials. |
| Sonja Haut | That just translated to the question on what would that mean for the accounting department in charge of actually making sure that the actual reporting is compliant and robust and they’re on time? And how would we be dealing with with such questions on non-financial. So and at some point the idea out of the a few ideas at that idea was want to pursue further that notion of measuring and valuing our impacts. |
| Kate Cacciatore | I guess at this early stage. This was several years ago before the field of impact valuation matured and into what it has become today, which is quite significant. And so were you were you reaching around in the dark a little bit? Did you already have a sense of a definition of what impact meant in that context? |
| Sonja Haut | Yeah, that’s right. And I think later editions now we’re recent additions are that impact is pretty much used as an PR term. It just makes people feel good about basically expressing that’s roughly the right thing. But the the practice of impact valuation comes with just very sobering ideas and definitions about differentiating metrics of impact from metrics of inputs and outputs, which are the dominant indicators in traditional financial reporting, but also in sustainability reporting, and then to possibly push it direction of outcomes for stakeholders or or impact to stakeholders. |
| Sonja Haut | And in the definition of the G7 impact task force, basically trying to assess what really has changed in the wellbeing of stakeholders due to a business activity. So in, well, such a beautiful definition wasn’t there from such a highly regarded institution at the G7, the impact task force that is now the available methodology is namely compiled by P.W see and true value by KPMG pretty much at that at the heart of their of the way they worked. |
| Kate Cacciatore | Right. And I think I remember from some of the conversations we’ve had before that in your accounting role with all the data points, the many, many, many data points of you know that are required of companies for ESG, I think you spoke about the fact that you can you can get a bit lost in all of those data points and that the impact valuation in as you have practiced it and described it, is more about understanding some more fundamental aspects and sort of clarifying with a very strategic focus. |
| Kate Cacciatore | Is that right? Would you how would you describe impact valuation in terms of getting beyond those many fragmented data points to a more holistic view of how business operates in society? |
| Sonja Haut | Yeah, this is pretty much the intriguing part that in the end let me also to write that book The Case for Impact, because I felt that this is so much more than what we originally thought it could possibly be, and it just deserves a wider, a wider audience. So and I think the winning point to get the attention of business leaders for for topics that are not classically viewed as as business is really to actually have this unifying unit of measure in because we express our impacts and in monetary terms and this is very much the case for all the examples shown in the case for impact, demonstrating how business value is brought about |
| Sonja Haut | through looking at the impacts of a company and expressing it in monetary terms and thus engaging differently with stakeholders in all their varieties, with all their different areas of focus and maybe zooming back without doing that, just alone in the environmental space, you’re confronted with a huge number of different units of measure, with tonnes of CO2 now being established and widely recognized, but of course tonnes of waste land and water and blue, green and gray water and and all of the other technical terms on toxicity. |
| Sonja Haut | And it gets very soon very confusing. And actually it’s clear that each of these themes require not just one Ph.D., but a whole series of, of deep scientific knowledge. And so, so to cut through that and just enable business leaders to recognize the essentials for their decision making is pretty much the strong point of impact valuation. |
| Kate Cacciatore | Yeah, absolutely. If we go back to your journey at Novartis and which is told beautifully in your book and I really would encourage everyone to read the book and not just for the background and the understanding of how the impact movement has developed and how impact valuation methodologies have become close to well towards convergence and standardization, but also for the examples and the spirit with which, for example, in Novartis you’ve explored this space. |
| Kate Cacciatore | So it would be lovely to come back and talk a little bit more about how did this get started, because I seem to remember that you in the book, you present different approaches that companies could take, but you also share what happened with the exploratory path that you took in Novartis and how it wasn’t necessarily top down, it was more bottom up or a sort of entrepreneurial approach. |
| Kate Cacciatore | Be lovely to hear a bit more about how it all started and what the different sort of turns in the path you encountered in that journey. |
| Sonja Haut | Yeah, will do. Or give an attempt at doing it. Yeah. So the starting point with the idea around impact valuation was really could that possibly be an answer to better decisions that are more encompassing and would that possibly be a basis for conversations with all stakeholders on a joint perspective on reality? And then would that possibly aggregate to disclosures as well? |
| Sonja Haut | Could that possibly be in addition to current disclosure practices? So with these three objectives, we piloted the approach approach in two very different countries in Kenya and in China. In Kenya, we had a substantial pre business model, philanthropic engagement that we were seeking to get to a self-sustaining social business level. And in China we had full fledged operations. |
| Sonja Haut | And so that was also to test out where the idea would resonate more strongly or what to do with such a tool should it ever work. So the first hurdle was, of course, the topic of feasibility. And once that was crossed out, it was really interesting to see how certain very practical elements on data availability in China allowed me to very quickly actually scale the approach for the entire company. |
| Sonja Haut | So because the it’s been clear from my I.T. and finance roles that whatever it is I propose, it would never really work if it came with an additional reporting burden. So to the extent possible, that had to be designed in a way that it really uses central data pockets, centrally available data and built on that. So that that was the design principle with the upside that once that worked, I could expand. |
| Sonja Haut | So based on that, that expansion included visibility on the environmental supply chain. So for the first time and very briefly, we had a view on the total environmental externalities, not only on operations but really full supply chain. And that was quite an eye opener just to understand the order of magnitude of such things. And well, despite of course, the happiness around feasibility and that transparency, the, the big question remained in that we had started actually was selecting indicators on on on what to pilot based on our materiality assessments, a practice that we had run since 2012. |
| Sonja Haut | And um, the, the idea would have been to actually have a response to every material item and have like an impact indicator. What turned out is that out of the existing practices at that time there was very little to say on, on social impacts and social risks and nothing really about the social impact of medicines. So it was clear that whatever, you know, as, as happy as I could be, that feasibility was a given and that scaling was possible. |
| Sonja Haut | It was also clear that there were major, major content gaps. So the what happened then over time was to scout for additional solutions and meaningful answers to a number of these gaps while seeking to understand how under which circumstances the data points identified could be meaningful for for business at Novartis. |
| Kate Cacciatore | It sounds like an amazing journey, and it’s interesting that you mentioned the materiality basis there, because it raises a question for me in terms which I’m sure will be in many people’s minds about impact as a discipline in a field being both intimately related to sustainability, but also breaking with some aspects of sustainability or going further than that. |
| Kate Cacciatore | And were you aware at the time, were you thinking through the fact that, well, this is materiality and indicators, but we’re definitely going further here and what how did that manifest in terms of the kinds of outcomes and impact that you were beginning to envisage with this, with the internal and external stakeholders you were engaging with? |
| Sonja Haut | I’m not sure whether going further was so clear and evident because our materiality assessment had been very broad and and really supported by a great number of external stakeholders as well. So it really felt more like operationalizing this into metrics, into measures of success. But of course other practices we had used were were clear that they would feed into, but that actually the ambition of impact valuation would be much broader. |
| Sonja Haut | So but it was really at the beginning just the ambition because we didn’t have an answer on whether jobs created would be good jobs or whether that environmental risk would. How that would compare to human rights violation risks in the supply chain and whether there’d be anything to be said on the social impact of medicines. That was clearly the number one results throughout the materiality assessments consistently and actually in line with the company’s purpose, in line with the with the key priority areas for sustainability, on focusing on access and innovation. |
| Sonja Haut | So that felt like a huge gap for impact valuation as a practice too to qualify. Yeah, if you wish. Mm. |
| Kate Cacciatore | Yes, I guess that’s also connecting to a point that you make very effectively in the book about ESG can often be seen from the perspective of risks and being more aware of risks, whereas impact just puts a lot more emphasis in addition to risks on the opportunities, the business opportunities and making that connection. And it strikes me also that in the book you make that connection very much with the purpose of the organization and you use a few examples of that to get across the importance of explicitly making a connection between the company’s purpose and some of these business opportunities and impacts that are sought in. |
| Kate Cacciatore | In the case of Novartis, it’s in the area of social impact of medicine among many others, I think. How would you describe that connection between purpose then and impact. |
| Sonja Haut | Still along the journey and these connection points weren’t weren’t evident initially. And so it was really initially just about making sure that that this is robust and and works that that everything can be scaled and the gaps closed. But then once these methodological gaps were sufficiently addressed, a larger a larger pattern started to emerge. So in parallel, we started to see a number of use cases across the globe. |
| Sonja Haut | And then all of a sudden we started to have also an aggregate view that was fairly complete. So now that brought about the next question on, on how to interpret that on an aggregate level for the entire company. And there’s just some intriguing paper by a number of high ranking academics from both sides of the Atlantic on, on the topic of how to measure purpose and and what the role is of metrics of values, value and success. |
| Sonja Haut | And this this paper on measuring purpose identifies impact as the ultimate goal for four metrics of success to what’s companies enacting their their purpose or seeking to strive towards their purpose and I think a lot more needs to be said and researched and and done. But clearly that that felt as one possible interpretation of these results to say, well, this is an expression on how well a company fares or on enacting its purpose and should become a yardstick for how to possibly further improve or set itself ambitious targets to go beyond what’s already there. |
| Kate Cacciatore | Yeah, that makes sense. And I think what’s connected to what you’ve just said, and which is very significant, is the convergence also with the different kinds of capitals that are now being expressed. I guess it’s a concept of thinking in terms of not just physical and financial capital, but social, natural, and what am I missing. |
| Kate Cacciatore | With the environmental, obviously different capitals. I wonder if you could tell us a little bit about the the context of the the capitalist coalition and the different protocols that have emerged as a framework to support and the work of impact practitioners such as yourself. |
| Sonja Haut | Yeah, Thanks, Kate. Conceptual response and a practitioner’s response on the conceptual side, the issuance of the Natural Capital protocol helped, of course to give credibility to the environmental impact side of our work and then later, as the social and human capital came about, we made sure that on the wording side and in a for, for all the principles put out by the capitalist coalition with which they aligned with with that at the same time, one cannot possibly think back. |
| Sonja Haut | But the notion of UN SDGs wasn’t that widespread at that point in time. So when we started off with impact valuation in 2015, they weren’t issued yet. But at the same time, certain elements of thinking around capital that are non-financial, that that thinking had taken hold. And intriguingly, one of my colleagues in the role of a of a country CFO picked that up and wanted to use this framing actually to introduce a new country president. |
| Sonja Haut | And actually he was sort of challenging me on whether whether the data I had on on his country could be used in that spirit and what was missing, basically, and and how whether that could be validated by the leading national think tank to actually get that contextualized. And I felt this super powerful and we started to actually call the entire activity a co-creation because this is pretty much what, what was necessary. |
| Sonja Haut | I, I hadn’t I admit I hadn’t dare to propose to frame the entire impact valuation work that we called social, environmental and economic impact evaluation pretty much sober along what it is and the no marketing name around it. But I wouldn’t have dared to give it that framing. And it was really with that country CFO running with this and actually framing it that way, that was one option of expressing that to an example that Marcus said and that was later followed by others. |
| Sonja Haut | So but not everything that we see now is was of course evident at at the beginning. But I think the power of the impact valuation approach is that we can say it’s has been field tested through different lenses across the globe and different variants and with different areas of emphasis. So I do continue to believe in its transformative power. |
| Kate Cacciatore | Absolutely. Yeah. Now that’s extremely helpful and I think I want to come back to the question of the process internally in Novartis, because I’m sure a lot of companies will be wondering, well, how do I start? What do I do? And you might have some suggestions or some ideas based on your experience. It very practically because one of the things that you mentioned was that the notion of stakeholder capitalism and the triple bottom line, these are these are notions that have been around for a really long time. |
| Kate Cacciatore | There’s nothing particularly new about them. But what is new about impact evaluation is that it puts the very practical managerial tools into people’s hands to be able to do something about it. So putting those two things together, sort of giving some practical advice, which you do very well in the book about how to operationalize this and reminding people that this is something actually quite is just fundamentally strategic and it’s common sense for business. |
| Kate Cacciatore | Perhaps you could share a few examples of what that was like in practice and what kinds of things you did together in that co-creation. |
| Sonja Haut | Yeah, will do. Kate So, yes, I mean, inevitably, because we were so early at Novartis, this had to be an exploratory activity that was of course supported by the company, but without calling it out as the number one or so sustainability activity, it was exploratory. So by nature we had to go a bit with the flow of what’s required and what resonated and evolve around that. |
| Sonja Haut | But I think with that done and with feasibility proven now in the meantime, also by the practitioners that have come together in the Value Balancing Alliance, there’s no need anymore to actually go down this long winded path of exploration. So any company that wants to go and hits the points straight, there could be just that very practical approach of utilizing the the published methodologies by the Value Balancing alliance, the papers that Novartis and others have put out to just get to the impact results really, really, really quickly and then get into the heart of the matter, which is debriefing, interpreting and and drawing conclusions on what the actions need to be |
| Sonja Haut | on the way forward. You can come at this, of course, as well, from as a result offer of a strategy exercise. And and here it really depends on what the strategic appetite is. But if one was to truly scout for megatrends and their implications on the business model, I do believe at some point you’d want to know how to actually measure progress versus strategic goals. |
| Sonja Haut | And my conviction it is that at this point in time, impact metrics are useful again. So it really depends on where you want to start, how much of a strategic impetus there is but with the book, with the Case for Impact, I’ve assembled examples that show how companies were capable of driving their top line growth, of driving their bottom line growth, and engaging effectively with stakeholders that I believe all of one doesn’t even need an overarching drive to do that. |
| Sonja Haut | It just makes good business sense. And I think that in itself is inherent motivation enough to go after measured impacts? |
| Kate Cacciatore | And what’s your sense about the availability of the data from, you know, whether it’s the social, economic or environmental aspects that you’re looking at in this exercise? Is the data available for these kinds of calculations? Is it do you need to have all the data in advance, or can you interpret and make sense of the data, even if it’s incomplete? |
| Sonja Haut | Yeah, super. Good point. Good that we touch on that. As I missed the comment on that earlier, A Yes, impact transparency is possible and to me the greatest breakthrough of the year has been really with the why for institute utilizing our value balancing Alliance methodology to provide transparency on the on a sector in Germany on their supply chain impacts and that’s been kind of impressive intellectually but ever so disruptive. |
| Sonja Haut | If you think about the options this means that this comes with four investors for governments, for anyone who wants to understand the social, environmental and economic impact of the sector much better. So this has proven that data is sufficiently available. Is it perfect? Certainly not. Nothing is perfect, but existing statistics give us enough insights to get going. |
| Sonja Haut | Now within companies, I know that data can be organized very differently and that things may not always be as straightforward, but at the same time convinced that, well, any company that that has some need for effective steering beat for their own operational needs, speed for tax purposes, speed for disclosure purposes will have the required data points available to at least have a meaningful starting point. |
| Sonja Haut | And then that’s just a matter of how massive the assumptions have to be to come to a complete picture. Where is it that you can actually use with direct data and where is it that you have to derive that? But feasibility is absolutely given. |
| Kate Cacciatore | Hmm. Okay. That’s really helpful. And as we were discussing earlier today as well in our conversation, it’s not just the data and what the data says, it’s the process of interpreting that data both internally and with the stakeholders. And I think you emphasized this point in the early chapters of your book about trust and having a common language with the stakeholders who are involved to kind of understand it’s not just the business perspective on what’s relevant, but it’s understanding those stakeholders perspective on what matters to them in that process. |
| Kate Cacciatore | Am I right in thinking that it’s it’s again, a co-creation with those stakeholders about what matters and ultimately what kinds of impacts should be sought and improved? |
| Sonja Haut | Yes, absolutely. So I think the starting point to engage internally and externally is to have impact transparency. And once that’s there, one can start to think about how to go about interpreting it and what the next steps would be and, you know, how how it would what implications it would come with if one was to improve the current impact situation. |
| Sonja Haut | That is reducing the negative but furthering the positive. And the the question is really what does good look like and what should be a meaningful benchmark for success? And here I believe this is where the role of stakeholders comes in. In my minds, it it’s hard for a company to actually articulate this in it by itself. So instead, by engaging with stakeholders, you will hear, oh, which type of performance they expect from you. |
| Sonja Haut | Also in terms of impact and, and, and also, I believe, with a transparent invitation, as we use it for the materiality assessments, but also in a number of multi-stakeholder debriefings. Then on the impact results. And it’s super helpful to understand what everybody wants a company to do and not all expectations are uniformly aligned. So that’s also helpful to understand what can be synthesized in a direct action plan and what is it where where certain stakeholders maybe need to find different paths to getting to their goals and where the limits are of what a company can meaningfully do. |
| Sonja Haut | But I think to explore that in a in an open manner and based on an invitation and based on, I’d like to call it a joint perspective on shared facts, that’s a just a strong starting point. And then one can, of course, disagree and one can look for different starting points. One can emphasize other aspects, but at least there’s a starting point for a dialog, which I believe is super important. |
| Sonja Haut | Um, it’s, it’s just super important for since you started your entry that this podcast is also about well having meaningful in contributions for civil society debates and for governmental debates. And I think that’s pretty much the essence of you need inputs for these debates and what should they be and can we find common ground of such a debate So interesting. |
| Kate Cacciatore | And it makes me think also about we’re obviously saying out of all that fragmentation and proliferation of data and different data points, we are seeing a convergence in terms of, you know, having common frameworks, common standards and even common sets of metrics around certain sectors. So I’m curious to know what you think about how this momentum in the impact valuation field is is going to meet up with this convergence in the sort of disclosure, sustainability disclosure frameworks and standards. |
| Kate Cacciatore | So, for example, the work of the ISSB, can we imagine in the future that the the common set of metrics that might emerge from this kind of work and on both sides, you know, from the ISSB perspective and also from the work of impact valuation practitioners, what might we see in the future? |
| Sonja Haut | Well, that would be ideal, right, that prospectively the ISSB and other regulators, standard setters embed impact thinking in what it is they ask from companies. And the reason why I would hope such a future comes true is because I, I see that that is a path whereby the interests of business can nicely match those of what’s required from society. |
| Sonja Haut | To the extent that is articulated through these regulations. And I believe that’s important in order for regulations not to not to digress to a tick boxing exercise for companies whereby data points are asked that are just don’t have a deep meaning internally and with with my experience in financial reporting, I just think it’s it’s best when these worlds converge when what’s required externally also makes sense internally and then you get to yardsticks of progress, success performance that are truly understood the same way by the company itself and by its external stakeholders. |
| Sonja Haut | So to me, this is this is this would be the ideal ideal scenario. It’s a few years out though. |
| Kate Cacciatore | Yeah, but I think we feel it right. We feel it and I felt it for several years and the signals are there. There’s so many initiatives and to the point that these acronyms of different organizations become a bit mind boggling. But it’s all happening and there’s a lot to learn. And you have provided many resources in your book and also on the Novartis website, there’s a link which will share in the text related to this podcast where people can find the use cases. |
| Kate Cacciatore | And if we just go back there for a minute to sort of talk about where Novartis is today, having gone through this exercise, if I understand correctly, there are many applications of impact valuation from sort of micro-level to the country level to understanding in monetary terms how the social, environmental and economic impacts of a country strategy, for example, are playing out and what that means to the future of the strategy and decisions that might be taken. |
| Kate Cacciatore | So that’s one aspect. And then on the other aspect, there’s the aggregated company view in a sort of integrated annual report perspective, where again you have these monetary expressions of the value created both in terms of the negative and positive impact. Perhaps you could just share a few words about where Novartis is today in that respect and where you see things moving in the future. |
| Sonja Haut | Yeah, um, where Novartis is at. Well, the resource that you mentioned on the virtual exhibition under CCI dash summit dot com contains external trends reference points, but also the published use cases that Novartis success with impact valuation. So these these use cases are quite numerous the mean time so they’re well over 70. more of course exist that are not published. |
| Sonja Haut | So here that gives a bit an indication for all the different flavors of of use cases but then and that that will undoubtedly continue I believe we’ve well we’ve done more than scratching the surface but but there’s there’s clearly more potential that is that is not yet harvested if I can say it that way. But but but then that’s of course, different to a view of corporate reporting, which is driven by the needs of staying compliant and having a report that appeals to stakeholder orders that are that are predominantly shareholders. |
| Sonja Haut | So that is almost a different dynamic there. So for for the past or years, the total impact valuation results have been part of the the, the web page disclosure of annual reports as well as part of that suit. And we’ll see how that continues. But it’s, um, it’s almost like a like a different world where by the drivers are not immediate immediate links to those non shareholder type stakeholders. |
| Kate Cacciatore | Mhm. Yeah. And I think what I take away from what you’ve written in the book and what I’ve learned from you just talking together is that what’s most important is the forward looking and intentions and what we can learn from the data and from the figures that the impact valuation offers in terms of being thinking about, okay, what decision will we take in the future? |
| Kate Cacciatore | What, how might we change our strategy as a result of what we have learned? I think that’s a very powerful element of impact valuation and the work that you’ve been doing, and it really speaks to that transformation, you know, potential that you mentioned earlier. |
| Sonja Haut | Yeah, In a recent conversation on on the ABC of Impact Investing, that has been named the the essence that impact is forward looking instead of just backward looking. And I think the key thing is exactly as you said, about how to debrief on these impact statements. And their nature is just so much more encompassing than other types of ESG indicators that often fail to connect to a bigger picture. |
| Sonja Haut | And I think that’s the biggest asset of impact valuation that it helps us get a simple story across without overly simplifying. And I think based on that, if if there can be interest in what that bigger story, then it’s possible to engage with people on it and not moralizing, but in an engaging, empowering way. That’s that invites people to think about what these figures mean and what their contribution is and what it is they can do day in and out to actually maximize impact. |
| Sonja Haut | And then once one is at that point of the conversation there, there’s of course a multiplication of opportunities on which measures to take in view that well, it needs to make good business sense. Right. But it becomes then an optimization problem whereby you have more, more parameters known and so and so it’s not surprising that along the journey a number of our colleagues have challenged me and my team to say, well, okay, now that we know past performance, give us our forecast. |
| Sonja Haut | We want to know where it ends. Should we should we continue business as usual? And can you give us a sense for which are the largest levers? So these are all but these types of questions and challenges and conversations are enabled by basically providing a starting point, which is a statement of transparency of what the impact of a company or part of the company is on society. |
| Sonja Haut | And then from there on, one can engage in conversations of what that means, what can be optimized and what the implications of that are. |
| Kate Cacciatore | Exactly. Yeah. And as you were speaking there, I was just imagining, I know that companies are already thinking in these terms about being able to visualize the scenarios, the different scenarios, and the different decisions that a company can take to to travel along the path of one or other of those scenarios. And how, you know, technology today is helping us to be able to visualize not just net zero pathways, but perhaps in the future. |
| Kate Cacciatore | What if we make this change to the product? What would happen as a result? And how could we integrate this perspective of a stakeholder group over here that we’ve been hearing from into how we might do things differently? So I think that’s a very exciting aspect of of how impact valuation is going to contribute to making things more real and immediate and tangible for practitioners. |
| Sonja Haut | Exactly. To meet this empowering aspect is really the, the strongest points in get people to think by themselves. Nothing would be possible to leave with just one person thinking along these lines or with one team proposing certain ideas. I think the more this can be supported by by broader groups who bring in their own expertise, their own skill sets, their own ingenuity to the challenges that lie ahead, the better. |
| Sonja Haut | So this empowering aspect is really one that that is one of the key strengths. I believe that Impact Valuation reveals on it. |
| Kate Cacciatore | Yes. And would you is there anything that you’d like to share in terms of your vision for the future? I think you’ve shared quite a lot about that. But anything else that you would like to add either in terms of your your vision for the future and also any advice that you might share with companies who are wishing to go down this path at this point? |
| Sonja Haut | Oh, let me start with the second first. Any company who’s interested in making sense of the currently super confusing world is well-advised to actually engage in impact valuation and just get their heads around what impact their business activities hasn’t that’s a great yardstick towards innovation, towards helping them remain relevant in that world of increasing complexity and challenges. |
| Sonja Haut | My vision and hope for our collective future goes beyond that. I would hope that with impact applied by businesses and governments and governments and investors, we could really move to something that some have called an impact economy, whereby performance values, success not only of businesses but also of nations is expressed in impact terms. And that way we have a something like a consistency to in the same extent as we currently have it, between financial performance and national performance as expressed in GDP terms. |
| Sonja Haut | So and I believe that would help us align on what it is that we want to achieve, that we have to achieve full term and would also help us allocate collectively resources and capital and in the best way then. Well, someone, since you ask for my vision, this is. |
| Kate Cacciatore | Yeah, I love that vision and I share it myself as well. And I think that it’s a very exciting time to be working in this field and for people in finance, in I.T. and sustainability, in any function in a company or outside a company to be contributing to this area. So I’d just like to thank you again for joining me today and sharing with us your expertise and your journey. |
| Kate Cacciatore | And I’m going to be going back and looking over all the notes I’ve taken from your book to really take away all the lessons that it and the resources that it offers. So I hope others will do the same. And I look forward to talking to you again in the future. |
| Sonja Haut | Thanks, Kate, for having me today. Thank you. |
| Kate Cacciatore | It’s a pleasure. |