Environmental, social and governance (ESG) indicators are now an indispensable part of investment decisions. They are no longer confined to an “impact investing” niche. Yet no matter how sophisticated ESG indicators become, they will always be limited by the timeliness and quality of data.
The consequences of getting it wrong are not trivial. In 2010, dozens of women committed suicide with some pointing to the debt collection practices of microfinance lenders. While the adverse affects of their behaviour were clear to locals, no mechanism existed to alert investors who, from offices thousands of miles away, had to rely on partial company sustainability reports and belated media articles.
A key challenge is that misleading results are only exposed when things have already gone badly wrong. When we helped investigate the barriers to making ethical recruitment in the Gulf profitable, it was clear that almost no employer of foreign labour was keeping more than the legal minimum records on employment conditions and health outcomes. Only the most egregious examples of employer bad practice made it into the press, by which time the reputational damage had already been done.
Set up geofenced communities in any place in the world and ask them a set of questions on a one-off or repeat, subscription basis.
Know what local communities think of the people, property or brand you invest in. Receive alerts when reputation-threatening events occur.
There are now many new tech-enabled tools to help you learn the knowledge, attitudes and practices of communities around the world. Whether you see them as consumers or beneficiaries, keeping in touch with these groups matters. Digital tools let you do so without the time and expense of traditional market research, and often with much better results.
We can divide them into two broad categories: online and offline survey tools.
1. Digital tools that allow you to read consumer or beneficiary sentiment online:
2. Digital tools that allow you to read consumer or beneficiary sentiment offline:
Each of these tools has its own strengths that make it more suitable for one use case over another. The choice should reflect your needs. Trade-offs are around cost, reach, reliability, and type of data. Here’s our (non-exhaustive) view on where you should call first:
Many of us need to connect with people in harder to reach parts of the world. In our experience directing research in 15 countries and 3 continents, we’ve learned 3 key lessons.
Your brand, your people, your project.
Verified contributors, robust data.
Alerts when ratings change.
Keep pace with rapidly changing views.
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