by Jan Moellmann
I believe in the power of technology, entrepreneurship and our agency as humans to build a brighter future. The rise of impact investing and impact entrepreneurship is a great expression of this. More and more people are using their talent, time and resources to work on a sustainable future, acknowledging that there is more at stake than just money. Impact investing and entrepreneurship are both trying to generate intentional and measurable positive social and environmental impact alongside a financial return. However, the difficulty faced by these actors is that there is a lack of data that would help to identify, incentivize and manage impact in a transparent, credible and efficient way.
Most, if not all, things that scaled extraordinarily well over the last decades were based on the availability of data that was then used for data-driven decision-making. Maximizing something requires measuring this something – be it user engagement for Facebook, delivery times for instant delivery services or simply financial returns for an asset manager. Now, what we need to scale fast to avoid collapse and to work towards a future in which the planet and people thrive is positive impact; hence, we need to measure this impact. If we would have the right data available, it would be possible to make better consumer decisions, to manage by impact objectives, to incentivize impact through regulation and even to bake impact into financial products to make sure that impact-generating enterprises have access to the funding they need to realize and scale their projects and products.
Unfortunately, measuring impact is not an easy task. I have been there. Working for a social enterprise on rural electrification in West Africa, I knew how valuable it would be to measure and communicate not only how many of our customers gained access to electricity, but also what this access to electricity means in terms of socio-economic development such as productivity increases, women empowerment, safety as well as access to healthcare and education. At the same time, it was difficult to gather this data. A typical social enterprise does not have scientists who understand how to collect such data accurately and also not software and data teams who could take care of a streamlined data pipeline for ongoing impact monitoring and reporting. Some digital solutions exist that approximate impact based on secondary data, i.e. forecasting impact based on similar projects. But is it really accurate, helpful, transparent or even morally acceptable to judge impact without measuring it where it actually occurs? I find this approach particularly concerning when it comes to assessing social impact: If we want to understand which products and projects actually change the lives of people for the better, we better collect the data at the source by asking the people whose lives we aim to improve.
After witnessing these challenges first-hand and talking to dozens of other social entrepreneurs who faced similar problems, I decided to start a software company in 2022 that supports impact-driven organizations and their capital providers in measuring, verifying and reporting their true impact. At leonardo, we try our best to measure sustainability where sustainability effects actually occur and then to use this data to empower impact-driven management and investment decisions. You can find more information about leonardo at https://www.leonardo-impact.com/
Technology plays a key role here: Large language models can be used for verifying, understanding and utilizing large amounts of interview data; the blockchain can be used for storing and transmitting impact data in a transparent and traceable way as well as tokenizing impact to make it invest- and tradeable. At the end of the day, though, it is not about the technology or data itself, but about using it for the right purposes. We need to stop wasting our talent, time and resources working on things that will only benefit one’s own bank account. We need to use technology and business to work on the things that matter. A brighter future is possible if we start building it together.
Author Info
Jan Moellmann is co-founder & CEO @ leonardo. impact and a doctoral candidate @ TU Munich. leonardo aims to make deep impact measurement, verification and reporting easy and credible. After 4 years as Finance Director of the social startup Africa GreenTec and while conducting research about the topic as a doctoral candidate at TUM, he discovered the great value that trustworthy impact data has for sustainability-focused enterprises, but also how hard it is to get this data – leading him to co-found leonardo. Jan holds Master’s degrees in Engineering Management from TU Braunschweig and Industrial Engineering from Georgia Tech where he spent one year in Atlanta on a Fulbright scholarship. He and his wife Lena live in Frankfurt, Germany, and love to hike and bike through mountains whenever they get the chance.