I'm Katherine Klein. I'm a professor in the management department at Wharton, and I'm also the vice dean for social impact here at Wharton. And this course module is all about social impact measurement. So when we give a donation to a nonprofit, it's supposed to have a social mission, or when we invest in a company that also has a larger purpose, a social mission or maybe we work for it, we'd actually like to know that that organization or business actually does have a positive social impact. We think it does, but we want to know whether it does. And that's why social impact measurement is so important. In essence, when we do social impact measurement, we're asking, does this thing work? And in this module, we're going to explore how we answer that question. Does this organization really have the positive impact? We hope it does. Again, whether we're talking about a full profit business, a nonprofit organization, even a government intervention, a church program, whatever it is, does it really have the impact that we hope it does? So before we start digging into this topic, let me begin and go through some definitions. We talk a lot about impact. It's useful to say when we're thinking about impact measurement, well, what the heck is impact? So if you look this up in the dictionary, an impact is an influence, an effect. So to have an impact is to have an effect on, to influence, to change something. An impact measurement is all about assessing change. It's about showing that a positive change has occurred or hasn't. And it's also about explaining why that change did or didn't occur. So this notion of change is going to be important as we go along. So let's talk about social impact because it's a term that gets thrown around and not defined very well. And let me offer some insights into this. I've talked about this somewhere in my module on purpose-driven leadership as well. So, in that module, I emphasized that businesses pursuing a larger social and environmental purpose might do this in one of three ways or all three ways. They might be working on meeting individuals basic needs for housing, for income. So maybe it's about meeting individuals basic needs. They could be working to create and ensure fair and equal opportunity. That's kind of a second outcome that's awfully important. And the third is that they could be working to overcome environmental challenges. So social impact, as I would define it, is about meeting people's basic needs, ensuring fair and equal opportunity and overcoming environmental challenges. It turns out that others pretty much agree with me, which is to say, I agree with them. And the UN has done some interesting work, the United Nations, elaborating what are called the Sustainable Development Goals, the SDGs. So the United Nations Sustainable Development Goals were adopted in September 2015, and they are 17 goals to end poverty, protect the planet and ensure prosperity for all. So I won't describe all 17 goals in detail, but I encourage you to look them up. I think they're impressive and interesting. I find it helpful to put them into buckets or categories, much like the ones I just described. So the first bucket of these 17 goals is to end poverty and meet basic needs. So what are the some of the goals that the UN has advanced? End poverty in all its form, end hunger, achieve food security and improve nutrition and promote sustainable agriculture. Another goal that fits in this category is ensure healthy lives and promote well-being for all at all ages. And yet another goal is to ensure availability and sustainable management of water and sanitation for all. So a lot of ways to meet basic needs and ambitious goals here. The second bucket is all about strengthening empowerment and inclusion. And this includes goals like achieve gender equality and empower all women and girls, ensure inclusive and equitable quality education and promote lifelong learning opportunities for all and promote sustained inclusive and sustainable economic growth, full and productive employment and decent work for all. So, again, several really ambitious and really important goals. The third bucket is about environmental sustainability and preventing climate change. First bullet, first goal: Take urgent action to combat climate change and its impacts. Second goal: Ensure access to affordable, reliable, sustainable and modern energy for all. And the third set of goals actually is all about conserving and using bodies of water, oceans and seas and land sustainably. So that's the third bucket about environment and climate change, and the fourth bucket is to build and maintain strong institutions for peace and justice. This includes goals like promote peaceful and inclusive societies, provide access to justice for all and build effective accountable and inclusive institutions at all levels. So using the UN SDGs, that is the United Nations Sustainable Development Goals, in my book, if your organization or business is working to end poverty and meet basic needs or working to strengthen empowerment and inclusion or to ensure environmental sustainability and prevent climate change or to build and maintain strong institutions for peace and justice, well, you're working to create a positive social and environmental impact. And so if you're working to do this, to create this impact, maybe, again, you're doing this as an employee, a volunteer, an investor, a, donor, you'd really like to know does that impact happen? These are major social issues, major environmental issues, major global challenges. If we can solve these challenges, we can eradicate poverty, slow climate change. That's phenomenal for the world. Can we do it? That's what impact measurement is all about. And the more we do measurement, the more we learn, the more we can improve our choices, improve our models and create greater impact. That's the promise of impact measurement. So before I conclude this first video, I want to mention one more term. Because you've heard me talking about the Sustainable Development Goals, again, we refer to them as the SDGs, and you may be thinking, "Well, wait a minute. There's this other term I've heard and it sounds sort of similar. What is it?" And that other term is ESG. ESG stands for environmental, social and governance criteria. And there is some overlap with this conversation about social impact, impact measurement, SDGs and ESG. So let me talk about ESG. So ESG standards or criteria are criteria that are used to evaluate businesses. And as we evaluate businesses for their financial performance, we can also look at their environmental social and governance. So the environmental criteria are used to describe how a company performs as a steward of the natural environment. Social criteria are used to describe how a company manages its relationships with its employees, with its suppliers, with customers and the communities where it operates. And governance criteria are used to describe the fairness or appropriateness of a company's leadership, executive pay, audits and internal controls and shareholder rights. So a few things about ESG. Typically, they're used to help investors identify companies that are well-managed and companies that are less likely to pose fewer risks to stakeholders and shareholders. ESG criteria are thus really generic. They're designed to be relevant to all businesses., So when it comes to impact measurement, that's a strength. We can use these ESG criteria across multiple companies. It's also a weakness. So if we want to know something about a company or an organization, focus specific purpose. Maybe it has a larger mission to combat child malnutrition, or to increase access to sanitation, or to increase girls access to secondary education. Those kinds of specific missions for a particular company, you're not going to capture that with ESG. So for most of this module, I'll be focusing on impact measurement, not ESG criteria. And in the next video, I'll talk more about what are we hoping to learn when we ask, what is the impact of this organization, this company?