TBLI ASIA 2015 - Juwei Shi - Impact Measurement

Aligning Impact with Business Model for Capital Reward

Yuwei Shi

“…the game is to enable the capital markets

understand a company’s strategy, align their

models with business performance and make

efficient and forward-looking investment …”

Michael BrayChair, Energy & Natural Resources

KPMG

“Investing with a gender lens is about creating

a new economic logic that bridges the market

logic of financial returns with the feminist logic

of women’s equality.”

Jackie VanderBrugSVP & Investment Strategist

U.S. Trust

ASPIRATIONS

FRUSTRATIONS

• Annual reports divorced from the time

horizon and information requirements

of capital markets

• Impact or sustainability reports seldom

demonstrating business value creation,

and not designed for capital markets

Some of the intangible factors are explained

within financial statements, but many are not.

IIRC FRAMEWORK: THE VALUE CREATION PROCESS

Customer

Activity

Resource

Relationship

Economic

Logic

Stakeholders

Activity

Resource

Relationship

Economic

Logic

What If We Treat Business Like A Social Network?

Description of Business Exchange Network

Stakeholders

Value Exchanges

• Carriers

• Values

• Resources & Capabilities

Stakeholder-Exchange Configurations

Business to Network Performance

Value Realization

• Bilateral exchange

• System-level exchange

Focal-organization Financials

• Revenue

• Cost

• Profit

• Cash flow

Risks

• Focal-organization position

• System-level outcome

Network Analysis Metrics

Worth

Reciprocity

Altruism

Endurance

Status

Autonomy

Group gain

Status consistency

Status competition

Uncertainty

Business Model Design

Monetization

Cash Flows

Probability of Survival

• Within-group Competition

• Ecosystem sustainability

Cost of capital

• Financial

• Manufactured

• Intellectual

• Human

• Social

• Natural

RAROC

Yuwei Shi, PhDResearch Director

Center for Social Impact [email protected] | Skype: yuweishi