Acumen Energy Impact Report

We’ve just launched the Acumen Energy Impact Report. It is the culmination of more than 10 years investing in early-stage, off-grid energy companies in South Asia and Sub-Saharan Africa, and more than four years of developing Lean Data, our approach to measuring social impact that’s built on the simple premise that talking directly to customers is the best way to build successful companies that make a meaningful impact in people’s lives.

The headlines are exciting: the $22 million we’ve invested in 20 companies has allowed more than 80 million people to have access to safe light, power, and cooking fuels. Three-quarters of these people—58 million of them—have access to modern energy for the first time.

Think about that for a minute.

$1 invested means three people can, for the first time, move away from dirty, dangerous, and expensive fuels like kerosene. Three people can turn on a light that costs nothing to charge. Three people can feel safer at night. All for a dollar.

But everything I just wrote, about what it means to have access to that light—is it really true? How can we know for sure?

It’s simple. We know by asking them.

At its most basic level, this is what we do with Lean Data. It sounds simple, but if we’d written this report five years ago, and you’d asked us the following questions, here’s what we’d have said:

Who exactly are these 80 million customers?  We don’t know.

Are they men or women? Rich or poor? We don’t know.

Do they really stop spending money on kerosene? How much? We don’t know.

Does financing create more access? Or more debt? We don’t know.

Do they use the light to run a business? To study more? We don’t know.

What about cookstoves…do they really get used? How often? We don’t know.

Do these answers differ for different countries, different customers, different types of business models? You guessed it, we don’t know.

OK, I’m overstating, but only a little bit. We’d know something thanks to the customers we’d visit in person. We’d have anecdotes from the companies in Board meetings. We would talk to management and to the sales team and learn from them.

But the simple truth is, the amount of educated guesswork was enormous.

The “impact math” you’d have found from us then, and which is still prevalent today in much of the impact investing sector, assumed that every customer in every place was more or less the same. It assumed that every product, no matter who it was sold to and where they lived, had the same impact.

And the thing is, those assumptions were often way off.

This isn’t just important in terms of how we learn, or in terms of how we deploy capital to solutions that make more of a difference, or even in terms of how we serve our companies better.

It’s important to the customers themselves. Really important.

If you’re the person buying a stove, and you still have to collect wood or charcoal for your other stove, it matters, because you’re still wasting time and money and your home is full of smoke.

If you’re the mother who saves up for a solar panel on her roof, only to discover three months later that the panel doesn’t work when it rains, it matters because you’re in debt and your home is still dark.

If you’re a customer off the grid and, despite tens of millions of new investment in off-grid companies, you’ll still be in the dark five years from now, it matters to you.

And if it turns out that certain products are bright enough, durable enough, and flexible enough that they make it easier to start and run a business, and if that helps more shops stay open later so more customers can make more money, and local economies can grow, that matters a lot too.

These are the questions we are starting to be able answer thanks to Lean Data—because we talk directly to customers (more than 5,500 of them, in this case, twice for each customer), we hear what they have to say, we learn about their lived experience and can use that to help our companies serve them better.

Some of those stories are here in this report: data on who the customers are, whether they save money, if they feel safer, if their homes are less smoky. With all this data at our fingertips, we begin to understand which companies have the most impact, which companies reach deepest into low-income markets, where there are trade-offs between financial and social returns.

Giving these customers voice to tell us what is actually happening in their lives, rather than just assuming that we know, is the first step towards real understanding. It’s the first step towards dialogue. It’s the first step towards holding ourselves accountable to the promises we make and the claims we share.

I don’t make a habit of reading nonprofit annual reports, and you probably don’t either, but this one is different. I hope you’ll check it out: bit.ly/EnergyImpactReport

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