Open for Good: A Revolutionary Solution to Social Impact Data Collection

Read what we discussed:

Karl Yeh:

So my guest today, my first guest, you probably seen her before or listened to her before. She's my co-host today. Her name is Erica Graham Jordan, she's the vice president of our mid-market with Benevity. My second guest is Kelly Clark.

She is an ESG specialist and stakeholder manager with a center for impact at the UCLA Anderson School of Management.

Thank you both for joining me today.

Erica Graham Jordan:

Before we dive into the work that you do today, folks, when they listen to this podcast and watch the show, they love to hear about personal experience.

So we'd love for you to tell us a bit about what led you here.

We know you were an environmental lawyer before, and now you're an ESG specialist at UCLA. So maybe tell us a bit about your career journey.

Many folks like the inspiration of what has led you to be with us today.

Kelly Clark's Career Journey

Kelly Clark:

So yeah, I've spent the last four or five years before this as an attorney and working as an environmental attorney focused mostly on water issues in LA.

And while I love the work and I loved helping clean up our waterways here, I always was frustrated by the fact that, by the time a problem got to me, a lot of harm had already been caused in the environment.

So I started looking for more proactive ways to be involved and ways to improve the environment in society.

And I came across sustainability and ESG, especially from the corporate side, because of what I'd seen as a lawyer was so often, many of the problems could have been mitigated if somebody had been thinking sustainably at the start.

And so that led me to start looking to transition my career into the sustainability space.

So I'm currently pursuing a doctorate at UCLA's Institute of the Environment and Sustainability and working for the Center for Impact in ESG.

So it's a bit of a roundabout career to get here, but I am really excited for both the work we're doing, and the potential that sustainability has to both transform business and improve society and the environment.

Erica Graham Jordan:

Kelly, I love that, particularly because so many folks, they could get stuck in that same cycle of where they are, but you actually looked at the broad landscape and you said, "What can I do to help prevent anything from getting here?" So I love that.

Thank you, I think that probably is an inspiration to many folks.

Karl Yeh:

Yeah. So, Kelly, let's jump into your current role.

Can you tell us a little bit more about the Center for Impact at UCLA, and how are you involved?

Center for Impact at UCLA

Kelly Clark:

Sure. So the Center for Impact at the business school is focused on inspiring the next generation of leaders to become social change makers.

So our goal as a center is to equip the students graduating with the tools and the inspiration and the skills they need to actually, not only become leaders in business, but become leaders in business who keep the social and the environmental aspects of their job in mind as well.

And so, to do that, the center works with students, we sponsor a number of student groups, we host conferences.

We have a social impact specialization, whereby students take set courses and then graduate with a specialization in social impact at the end of their time.

The center also has recently started a new project aimed at increasing corporate transparency in sustainability reporting. And that's where my role comes in.

I just joined the center back in July, it's a fairly new position that was created.

But we are working to both make sustainability information, open access, but also usable to both the students who are interested in learning about it, to businesses who want to figure out how to do better, and to people in general, to consumers who want to investigate what the companies they're buying products from are doing and how they're reporting and what they look like.

So my role is part of a team on the Open for Good project where we are both collecting, managing, and analyzing all of this sustainability data that is out there to try and let people have the raw information and make their best choices from that.

Karl Yeh:

Do you ever see, I guess, the educational component? Do you ever see that going beyond specialization so there would be actually degrees or advanced degrees that students can take?

Kelly Clark:

I think within the MBA curriculum, because I'm situated in the business school here.

Within the MBA curriculum, I think specialization is going to be the more common way.

I think more advanced degrees are likely going to focus more on specific aspects of sustainability, so things like a carbon or a climate expert, engineering expertise, and other more focused things besides business management.

Personally, I think it would be great if there were more specific, business oriented sustainability programs out there, and I think UCLA Anderson is doing a really great job of incorporating that into their curriculum because, when you think about it, sustainability really cuts across all aspects of business.

If you look at where it is in organizations right now, it's interacting with accounting, it's interacting with law, it's interacting with supply chain and operations and strategy.

And so, we're also working to try and incorporate it more broadly into the curriculum because it is everywhere. Everybody should understand it going out into the world we're seeing now.

Karl Yeh:

One final thing here, over the past couple months, I've interviewed a lot of social impact professionals, and it's just neat to see the varying number of people from different fields who are making the career transition.

So it could be anybody from sciences to communications to HR, to all these different professions, which is really a fascinating, maybe even a great opportunity, where one field has all these different perspectives and all these different talents and backgrounds now part of it.

Background Diversity in the Sustainability Field

Kelly Clark:

And I think that's really why sustainability can be so powerful. Because with it, you're no longer thinking in a silo, you're not thinking of, what is the most recyclable material.

You start thinking about what is the most recyclable material and provides good jobs, and doesn't pollute the environment?

And by taking the systems perspective, it, one, does foster collaboration among people of all different backgrounds, but I think it provides better solutions that way too.

Erica Graham Jordan:

Thank you, Kelly. I think this conversation is so interesting because you do, you think about all this brain amalgamation of all these really smart people in all these previous industries and how much impact it'll make?

And I want to keep back to something you said earlier around data collection, right? It sounds as though you're looking to solve a problem here in terms of data collection.

So maybe let's just sit in that for a minute and understand, what are the current challenges around collecting this data? And why is having the right data so important?

Challenges of data collection in social impact. Why is it important?

Kelly Clark:

So data collection is a huge challenge in this area. Right now, all sustainability reporting that companies are doing is entirely voluntary.

Companies are doing this because of pressures from stakeholders, employees, their board, it's coming from all directions. But as of right now, it's not mandated.

And so, companies are tailoring their own reporting to what they see as most important, which is great because it does provide insight into where they think their biggest impact is.

But it also leads to a lot of challenges because, one of the goals of the sustainability reporting is to be able to compare companies performance against each other.

Is company A better at managing emissions than company B?

But if people are reporting things differently, that's a very hard task to do.

And also because none of it is mandated, people report things in very different places.

So we have been collecting information from the S&P 500, so very large companies. And we are finding the relevant information in websites on their sustainability reports, in their SEC filings, and it's in a lot of different places, and spending the time to find this information is a big resource cost.

So for most people, and most companies even, undertaking the effort that we have undertaken is just not feasible.

And so, we are hoping to fill that gap and be a resource for people to have easily accessible sustainability data.

So this is also complicated by the fact that not everyone is reporting the same metrics, even when they're measuring the same phenomenon.

And so, if you are interested in a company's water usage, someone may report gallons withdrawn, someone may report gallons consumed, someone may report gallons withdrawn from a high stress area.

And so, it's just trying to get all of this into a comparable format is difficult. And part of this is driven by the fact that there are a number of reporting frameworks out there and all of them have very good bonuses, but some are more focused, some are sector based, some are universal.

And until we have some alignment on what companies should be reporting and how, understanding and gathering the data out there remains a very big challenge.

Karl Yeh:

So let's actually shift to the Open for Good platform. So Kelly, can you explain what it is, what are some of the benefits, and why should companies actually use the platform?

What is the Open For Good Platform? What are the benefits?

Kelly Clark:

So we've undertaken this effort to gather all of this data for these companies, and our goal is to make it accessible, presentable, usable.

And so, what we have done is, we used a set of metrics originally from the World Economic Forum that we've modified slightly, that were aimed at being both universal, so things that every company should be, should be useful to every company, and also that were already being reported, it was part of the claim to this framework.

So we went and looked at whether these large companies were actually reporting this information.

And we ultimately found that a little under half of the metrics were reported, and that the way companies were reporting some of these were very different among them.

So what we've done since then is take all of this data on both who is disclosing what information, and what they are disclosing, and put it into a dashboard, which we're working on.

And in this dashboard, you can see some of the substantive findings on some of the reporting percentages.

So for example, we have greenhouse gas emissions data from all of the companies who have reported it.

And what we see is that, a high number, about 80% of companies are actually reporting their scope one and scope two emissions, which is great, but only about 60% are reporting their Scope three, and there are a lot of reasons for this.

But our dashboard can help you see, who are the leaders in this field? Which companies are reporting scope one, scope two, and scope three?

Which companies are reporting their water usage, which companies are reporting their diversity and representation within their company?

So we are hoping that all of this data put together can both provide a resource for consumers who are just interested in how companies are performing.

But more importantly for businesses.

Because right now, if you're a business and you want to understand how you compare to your peers, there are a few ways you can do this.

You can do what we did and go read a lot of sustainability reports and a lot of SEC filings, but that's going to take somebody a long time.

Or you can pay what is, normally we call a third party rating agency. So these are companies who provide sustainability scores.

So Bloomberg is one of them.

You may get a certain rating on Bloomberg, and that essentially is supposed to show how you compare to your peers.

The trouble is, all of these rating agencies, and there are a lot of them, their scores don't agree across companies.

So you may get a high rating in one, a low rating in another, but because these are their scores or their proprietary information, there's not a lot of transparency into how those scores were obtained.

So if you get a high rating on one and a low rating on the other, you don't necessarily know why, which means you can't really figure out how to fix it.

With our dashboard, we are hoping to be able to show a company how they compare to others in their sector, and ultimately across the S&P 500.

And we are working to be entirely transparent on how those ratings are achieved so that you actually can see that, well, a lot of companies in my sector are reporting this metric, and I'm not reporting it.

So maybe looking into that is one way to improve my performance.

Karl Yeh:

Do you see that the Open for Good platform becomes the standard that most companies either look towards, look at benchmarks, whether maybe in investors look at across the board for sustainability?

Kelly Clark:

So we are hoping that we will, one, build on a lot of the great work that other industries, companies and NGOs and governments have done to establish what metrics are most important. And we will then collect the publicly reported data and put it here.

So companies can use this as a resource.

And we think there are a lot of really great metrics out there already, so we are probably not looking to create an entire new set, but rather focus on really, the ones that we see as most universally.

One of the things that's been lacking in the third party rating agency is some of the academic rigor and the peer review of how the methodology is there, how ratings are achieved, how all of this.

And so we are hoping to kind of open that up.

Karl Yeh:

There's a second part to my question here is, are there any key areas around, let's say education and measurement, where you see companies are challenged with measuring their impact, understanding their impact, or even both? What would be your advice for them?

Key areas on education and measurement for companies challenged with measuring impact

Kelly Clark:

I think there are a lot of areas that are really challenging to measure impact in.

On the environmental side, I think scope three emissions are challenging.

We have a protocol for them, the GHD protocol lays out a methodology, but it requires a lot of thought and careful planning and discussion with potentially many, many suppliers of how to calculate and report it up.

And so even though there's an established protocol for that, it's a challenge for most companies to do and to do well.

Similarly, biodiversity represents a really big challenge for those companies interested in assessing their impact, because it's such a complex phenomenon.

On the social side, one of the things we saw was actually that, not as many companies reported on the diversity of their workforce as we expected.

Companies are mandated to collect this information under... Larger companies are mandated to collect this information on through the EEOC, and they submit a form every year detailing it, but only some companies are actually posting that information.

And so, for metrics like that where the cost to publicize it would be very low, it was surprising to us that we didn't see more companies doing that, who are working to be sustainable.

Erica Graham Jordan:

You've given us so many things to think about. We think about benchmarking, we think about accessibility to data, the work it takes to go find all that data, even things, if you're already reporting on something, how to publicize and share it in a broader scope with rigor.

As we think to the future measurement, what are one to three areas where you think we should pay particular attention and where...

We have a range of listeners on the show, so some might be in the beginning of their journey, some might be more advanced.

But maybe a couple areas of guidance maybe for the beginners and the more advanced practitioners. What are one or three areas where we should have them start paying attention as it relates to measurement?

What areas to pay attention to relating to social impact measurement?

Kelly Clark:

I think the most immediate area coming is the climate disclosures for US companies proposed by the SEC. We're expecting a final rule, maybe even by the end of this year on what those disclosures will actually look like.

But these are going to have deep implications for companies and their supply chains depending on how they're implemented.

So that would be my first place.

Especially for novices, that's your first place to start, your emissions and disclosures related to those emissions.

I think the next place that companies and people working in sustainability can really have an impact is adding their voice to the conversation around standardization.

How we standardize metrics, how we create a set that is workable for a wide range of companies is a really challenging issue, and I think the more people who can start thinking about how we do that for their business, for their industry, for their sector, can really help on that front.

And then for the most advanced ones, one of the areas that I think is personally very exciting is, how do we develop biodiversity metrics?

And so thinking about how we can connect these global goals of preserving biodiversity hot spots, creating functioning eco, or preserving functioning ecosystems, and how we tie that down to actions by corporations.

Especially corporations who may not be directly involved in agriculture or land use, and how we can work those together to create metrics that not only do a reasonable job of assessing impact, but provide avenues for improving biodiversity from cities to agricultural to wild areas.

Erica Graham Jordan:

That's so specific and helpful. I think a lot of folks come here and they look for some direction, so thank you for sharing that with us.

I think your expertise, both your career history, but also clearly your passion and the work that you and the team at UCLA are doing. Thank you for taking the time to share that with us today.

Karl Yeh:

So Kelly, if any of our listeners or people viewing the video want to learn more about the Open For Good platform, what's the best place to learn more?

Kelly Clark:

So on the Center for Impact website, we have a link to the Open for Good project.

We are always looking for corporate partners to join us and advise us, and especially in this early stage, to really give us their thoughts on how our data can be useful to them, because that's our ultimate goal is, we want to make our data useful.

So they can go to that website.

We have our report we published in May 2022 about the state of corporate sustainability disclosure, which details all of our findings and our analysis and our recommendations.

So that is available for download, and we also have a short research brief for those who don't want to dive all the way into the report and just want a quick summary of what we did and what we found there.

Karl Yeh:

And we'll leave those in the description below.

So Kelly, thank you very much for joining us today. If any of our listeners or watchers again want to connect with you personally, what's the best place to reach you?

Kelly Clark:

LinkedIn is great. I always welcome new connections and conversations about sustainability.