In the world of technology marketing, the discipline of measuring Return on Investment (ROI) is very much genetically coded into how you go about creating and executing marketing programs. When measuring short term returns to tactical investments, ROI makes sense. It is a simple and easy way to measure success and justify spend.
However not all decisions are simplistic in nature, and the complexity of decision making is greater than a single measurement system.
Demographic shifts are putting increasing pressure on the way in which we assess and
determine rationale to our investments and decisions. Generation Z is now entering the
workforce. This is a generation who value the environment and social good. It's a
generation that are both digitally savvy and environmentally aware. And it shapes their
decision making, from the brands they support to their career choices.
A perfect time for the introduction of ESG mandates. ESG : Environment, Social and
Governance Standards is increasingly showing us that ROI is important, but it is not the only measure of success.
On November 3 2021, at COP26, the IFRS Foundation Trustees announced the creation of
the International Sustainability Standards Board (ISSB), with a mandate to deliver a global
baseline on sustainability disclosures. The recommendations are expected to be rolled out
in January 2024. Principles for Responsible Investment (PRI) has recommended to the
Australian Treasury, that the recommendations are phased in to Australian mandated
reporting, from 2024.
The expanded reporting will over time, mandate a new way to consider the outcome of investments. Or, as Iggy Pintado has clearly argued, a Return on Outcome.
Here are some examples of expanding the decision making to a more comprehensive ROO
approach, and, what I believe to be, a key enabler to ESG Mandates.
Use case 1: Assessing the formalisation of partnerships with new suppliers.
In this example, harnessing experience in the property sector, here are some examples of
questions which are answered today in assessing the ROO of a new supplier contract.
ROI: What is the ROI of the relationship? This would be an assessment on what the
costs of setting up the partner would be and what the expected revenue and profit is
forecast to be throughout a set period of engagement.
E: What is the impact to carbon emissions? This is initially reviewed based on the
metrics provided by the supplier’s operation, however increasingly data is being
considered for the entire supply chain used by the supplier. This is dependent on the
availability of digital twin and data.
S: Can we verify that no human slavery practices are used throughout the supply
chain? Australian legislation enacted on 1 January 2019, requires certain entities to
submit a Modern Slavery Statement that addresses risks in their operations or supply
chain.
G: How has the decision been made, and have the appropriate people been
consulted to ensure all risks have been considered? There are some very well
documented cases of companies using data for monetary reasons which are not in
the best interests of the community, which demonstrate how important good
corporate governance is.
In London, at the Sri Services Good Money Week Event in 2022, Scriberia was
leveraged to capture visualisations of discussions held by experts across the week.
The complex circular economy, showcasing the supply chain shows the complexity to
assessing the outcome to decisions.
It is more than a return that matters – it is the impact to the environment, to the community and our fellow humans that is truly at the heart of a decision like adding a supply chain partner to the mix.
Use case 2: Marketing Campaign for Not for Profit
ROI: A current standard, reviewing the Expected Revenue to be created from a tactical execution and spend. At Christina Noble Children’s Foundation, where I am a
Board Director, we currently plan to host a Gala Ball. The most simplest measurement to justify the initiative is the revenue expected through sponsorships, auction sales and donations compared to the spend. However this would not be a complete assessment of the initiative:
E: Did you know that Women and Girls spend a collective 200 million hours fetching
water every day (UNICEF). Lacking access to clean water, the burdens of collecting
water from nearby rivers weight heavily on girls and women. The time spent on
this chore often means girls miss school, and women miss out on opportunities to
earn a living and pursuing their careers.” By generating revenue for CNCF, the
foundation is able to provide clean water and safe sanitation to more vulnerable
communities in remote and poverty stricken community areas of Vietnam through
out CNCF Capital projects. All whilst ensuring girls and boys have the time and opportunity for education.
S: Thriving communities mean inclusion for all. Since inception, Christina Noble
Children’s Foundation has established over 169 projects, providing services to vulnerable
children and their families. These projects have directly assisted over 867,567 children
and have impacted the lives of over one million children and adults collectively. The revenue will drive new revenue to directly assist more children and their families, breaking intergenerational poverty and creating communities in Vietnam and Mongolia which are truly thriving.
G: In developing the framework for a gala ball in Australia, CNCF has engaged both
the Australian board, the International Board and also our Global CEO, Helenita Noble. This
is not only ensuring a sharing of best practice, but also for the identification of risks relating
to the type of sponsors we bring on board, and the way in which revenue is generated.
In both these examples, ESG is shown to enable decision making and reporting which is greater than ROI. It is truly a Return On Outcome which is meaningful to the company, the community and most importantly our fellow humans.
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