Does impact come off the peg?

A reuse shop in a mid-sized Dutch town receives a questionnaire from its bank. It follows the VSME, the voluntary European standard for sustainability reporting by small and medium firms. There are boxes for headcount and for emissions, and every one of them can be filled in. What has no box is the reason the shop exists. Some of the staff spent years out of work. After a year behind the counter, a few of them will pick up the phone again. There is nowhere to put that, so it stays blank.

The words do not help. In Dutch, the two terms at play here are normering and normalisering, and both are slippery. A norm can be a ceiling you may not go above, as in the Dutch law that caps executive pay in the public sectorSource: Rijksoverheid, wetten.overheid.nl, Not yet checked. It can also be a shared yardstick that different parties measure against. Standardisation is the everyday work of bodies such as NENSource: Stichting Koninklijk Nederlands Normalisatie Instituut, Not yet checked in the Netherlands or BSISource: British Standards Institution, Not yet checked in Britain. They agree what a screw or a measurement should look like. In data, normalisation means something else again: rescaling numbers so they can sit side by side. Here we mostly mean that last sense, taken broadly. Cutting everything to the same size so it can be compared.

First, the case for it, because it is real. Standard clothing sizes were a clever invention. You can order trousers without anyone measuring you, and a medium in Leeds hangs roughly like a medium in Bristol. A standard does the same for impact. A funder backing dozens of organisations would otherwise be reading as many dialects. A resident who wants to know whether the firm down the road is cutting its emissions cannot check a thing without a shared definition. And anyone free to choose their own measures tends to choose the flattering ones. Standards such as the ESRSSource: EFRAG, Not yet checked and GRISource: Global Reporting Initiative, Not yet checked make that harder. That is why we think they are sometimes necessary, not just convenient.

Still, the size chart is not a law of nature. The CSRD shows how much it can move. At first, large companies from about 250 employees were to reportSource: Europees Parlement en Raad van de Europese Unie, Not yet checked. Since the Omnibus package, the duty only applies above 1,000 employees and €450 million in turnoverSource: Europees Parlement en Raad van de Europese Unie, Not yet checkedSource: Linklaters, Sustainable Futures, Checked. Choices sit behind those numbers, made by people with interests. The ISSB standardsSource: IFRS Foundation, Checked look mainly at what sustainability means for investors. That is a fair way to look, but it is one way. Whoever draws up the size chart also decides which body counts as normal.

And no body is exactly a medium. With clothes you notice straight away, from a sleeve that hangs past your wrist. With impact you notice later, because what does not fit is quietly cut off. Say six in ten participants find work after a programme. In a neighbourhood with high rates of low literacy, that means something different from what it means in a university town. In the table the two figures sit next to each other as if they described the same thing. The context, if it is there at all, is in a footnote.

What happens next is harder to see. An organisation measured against the same size year after year slowly grows into it. It picks participants who help the percentage, and does less of the work that has no box. Nobody decides this; it just happens. Normalising then comes close to its plain meaning, becoming normal. What made the organisation its own does not disappear because someone deletes it, but because the form has no room for it. Small organisations feel this first. For a large company, one more indicator is a line in a system. For a reuse shop with a coordinator on three days a week, it is an evening.

Anyone working with a standard often ends up keeping two sets of books. One set holds the standard size, so a bank or funder can compare. The other holds the indicators that really matter for this organisation, along with the rights holders and stakeholders they matter to. That second set is meant for all of them, not only for whoever pays. Whether that is the right balance, nobody is quite sure yet. Sometimes the second set of books becomes an annex nobody opens.

Sometimes a standard shows how this works from the inside. For a long time the B Impact Assessment added everything up into a single score. Above 80 points, a company could become a B CorpSource: B Lab, Not yet checked. A harmful effect in one area could be made up for with points in another. That way a company with a weak spot could still score well. B Lab’s new requirements no longer allow that: a company has to meet a minimum on every topicSource: B Lab, Not yet checked. Harmonisation between standards has helped here, as it makes it harder to cover up the downsides. A single figure that summed everything up turned out to hide something, and several measures side by side brought it back into view.

We would like a standard to say where it pinches. We would like every comparable figure to state which body the size was cut for, and what fell outside it. A figure that names its own limits is easier to set beside another one, because you know where the difference lies. Doubt about the size belongs in the report itself, not in the footnote.