Designing the Approach
As we set out to build a community-powered platform for Conscious Trade, we knew it would be critical to identify new ways of relating with one another to measure our positive impact.
Our research into existing models surfaced two main categories for measuring impact:
1. Concrete Metrics and Impact Assessment
2. Principles and Stories
Both have advantages and limitations. Top down approaches to impact measurement, which traditionally are designed to benefit financial intermediaries, 3rd party certifiers or buyers, are a thing of the past.First, measurement was done for accountability (Metrics 1.0). Second, the impact sector turned to standardization(Metrics 2.0). In both phases impact evaluations feel extractive for the farmers, who need to answer many survey questions. It is time for a new form of measurement, to identify and reach true value creation (Metrics 3.0).1
Social enterprises and their impact investors have either worked through these three phases, or are still in process, depending on progress.
Yellow Seed prioritizes impact based on creating value for farmers. Our bottom-up, human-based approach is in line with Metrics 3.0, placing farmers first, as the beneficiaries of the impact measurement process. Metrics 3.0 is aspirational, defined in different ways, and fundamentally about providing value to each participant in a supply chain, rather than prioritizing investors over contributors, for example.
We believe the Yellow Seed approach is a step forward, where farmers choose their own social, environmental or economic targets. These are related to their own lives and businesses, where positive and negative impacts are reflected.
On the Yellow Seed platform farmers are transparent about costs, prices, their farm activities and business. Buying goods, as well as collecting data from the farmers, is part of achieving our goals for a system that works for each person in it. In this way all stakeholders up the value chain, buyers, traders, importers, processors or manufacturers, contribute to creating positive impact that is needed, according to the people who initiate all trade activities: the farmers.
Through our human-based approach, the measurement process becomes a part of creating the positive impact we seek, and is less burdensome for the farmers. They answer questions that track their needs and the goals they set for themselves.
As we listened to farmers, buyers and intermediaries over the years, we learned:
Buyers recognize that farmers are in a historically disadvantaged position, in terms of running a profitable business: more limited access to markets, finance and services, and higher risks due their agricultural production activities.
No two sourcing situations are exactly alike.
There is a fundamental desire for connection, a sense of belonging and partnership.
Cacao trade is as much about “the relationship” as the transaction, meaning financial return is only one part of the value exchange.
Buyers and farmers desire trading partners with shared values.
Building trust requires a way to ensure everyone is cared for along the way.
A living income is based on context and each organization at origin has different immediate needs.
Paying more money does not necessarily translate to meaningful impact or making a positive difference.
Producers and people working at origin desire more opportunities for entrepreneurship, directing and evaluating what success looks like to them.
These insights led us to develop a more holistic and human-centered approach in our impact analysis.
We are working towards an impact data model that:
Is farmer-driven and provides better tools for decision making at origin
Is participatory and gives voice to all parts of the supply chain
Values an individual’s definition of ‘positive impact’ and meaning
Demonstrates or reflects value beyond the basic commodity price
Meets the needs of multiple stakeholders in various stages of improvement
Continually surfaces information and evolves based on feedback and input
Values the creation of connections and relationships
Combines the best of both impact assessment and stories
Unites and uplifts the community
Metrics 3.0: A new vision for Shared Metrics. https://ssir.org/articles/entry/metrics_3.0_a_new_vision_for_shared_metrics