In today’s rapidly changing world, businesses are increasingly recognising the importance of not only maximising profits but also making a positive impact on society.
It is important to the people they employ, their customers and their investors. It is a key part of the Sustainability agenda.
This shift in mindset has given rise to the concept of ‘social impact’, which refers to the effect an organisation has on the well-being of people and the environment. To effectively assess and enhance their social impact, businesses must employ reliable measurement techniques.
In this post, we will explore what social impact entails, why businesses should measure it, the frameworks available for measurement, and how to get started on this crucial journey.
What is Social Impact?
Social impact is the positive or negative effect that an organisation has on individuals, communities, and the broader society. It goes beyond solely financial metrics to encompass environmental sustainability, social justice, and ethical practices. By measuring social impact, businesses can understand the consequences of their actions and make informed decisions to align their operations with social and environmental goals.
Why should businesses measure Social Impact?
There are many reasons why measuring your social impact is good for your businesses and even better for the GOOD you can do. They include:
- Enhance Business Reputation and Brand Value: Measuring social impact allows businesses to demonstrate their commitment to corporate social responsibility, sustainability, and positive social change. By quantifying and communicating their social impact, businesses can build trust and credibility with stakeholders, including customers, employees, investors, and the wider community. A strong reputation for social impact can differentiate a business from its competitors and enhance its brand value.
- Drive Business Strategy and Decision-Making: Measuring social impact provides businesses with valuable insights into the outcomes and effectiveness of their social initiatives. It enables data-driven decision-making, allowing businesses to allocate resources, set goals, and prioritise activities based on the areas where they can create the most significant positive change.
- Identify Opportunities for Improvement and Innovation: Social impact measurement helps businesses identify areas where they can improve their social and environmental performance. This information can guide the development of new products, services, and initiatives that address social needs, contribute to sustainable development, and generate long-term value for the business and society.
- Attract and Retain Talent: In today’s competitive job market, employees increasingly seek purposeful work and meaningful engagement. Businesses that measure and communicate their social impact can attract and retain top talent who are aligned with their values and social mission.
Where do you start to understand your Social Value?
- Define Your Goals: Begin by clearly defining the social impact goals you wish to achieve. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART). For example, you might aim to reduce your carbon emissions by 20% within the next five years or enhance the well-being of communities in which you operate.
- Identify Key Performance Indicators (KPIs): Once your goals are established, identify the KPIs that align with each goal. KPIs should be measurable and relevant to your business and its social impact objectives. For instance, if your goal is to improve employee well-being, KPIs may include employee satisfaction scores, training and development investments, or the number of workplace accidents.
- Collect and Analyse Data: Gather data on your identified KPIs using internal records, surveys, and external sources. Ensure the data collection process is rigorous, reliable, and aligned with recognised standards. Analyse the data to assess your social impact performance and identify areas of strength and improvement.
- Report and Communicate: Share your social impact performance through regular reporting and communication channels. Develop a transparent and engaging report that highlights your achievements, challenges, and future goals. Consider utilising online platforms, such as social media and your company website, to showcase your commitment to social impact.
What should you do as a business to improve your Social Impact?
We often advocate that social value can be enhanced if you align your social ambition to the nature of the industry your work in. Why? Because you often can maximise the value you create. An example of this would be an IT company having charity days out painting school rooms. Good fun maybe, but potentially they could have greater value supporting the school using their IT skills. Just food for thought…
If this makes sense to you, we have listed some ideas below for 10 sectors of ways they can drive Social impact which is aligned to their industry….
Examples of Social Value impacts by sector
- Healthcare Sector:
- Increasing access to healthcare services for underserved populations.
- Improving patient outcomes and satisfaction through enhanced care coordination and patient-centred approaches.
- Reducing healthcare disparities and addressing social determinants of health.
- Promoting preventive healthcare and disease management programs.
- Supporting mental health initiatives and reducing the stigma associated with mental health conditions.
- Education Sector:
- Enhancing educational opportunities for disadvantaged communities.
- Increasing literacy rates and improving educational outcomes for students.
- Promoting inclusive education for children with special needs.
- Supporting vocational training and skills development programs.
- Fostering innovation in education technology and digital literacy.
- Environmental Sector:
- Reducing carbon emissions and promoting renewable energy adoption.
- Implementing sustainable waste management practices.
- Conserving biodiversity and protecting natural habitats.
- Promoting sustainable agriculture and reducing environmental impact in the food supply chain.
- Engaging in reforestation and afforestation initiatives.
- Technology Sector:
- Bridging the digital divide and supporting digital inclusion by improving access to technology and digital skills training.
- Developing tech solutions to address social and environmental challenges.
- Promoting data privacy and cybersecurity measures.
- Supporting social innovation and entrepreneurship through technology.
- Advancing digital inclusion for marginalised communities.
- Finance Sector:
- Increasing access to affordable financial services for underserved communities.
- Promoting responsible investment practices and sustainable finance.
- Supporting microfinance and financial literacy programs.
- Addressing economic inequality through impact investing.
- Facilitating social enterprise development and access to funding.
- Construction Sector:
- Promoting sustainable building practices and green infrastructure.
- Enhancing energy efficiency in construction projects.
- Implementing socially responsible labour practices and promoting worker safety.
- Creating inclusive and accessible spaces for people with disabilities.
- Investing in affordable housing and community development initiatives.
- Non-profit Sector:
- Addressing social issues such as poverty, hunger, and homelessness.
- Providing essential services, such as healthcare, education, and social support.
- Advocating for policy change and social justice.
- Engaging in community development and empowerment programs.
- Promoting volunteering and community engagement.
- Retail Sector:
- Supporting fair trade and ethical sourcing of products.
- Promoting sustainable and eco-friendly products and packaging.
- Creating employment opportunities for marginalized communities.
- Supporting local artisans and small businesses.
- Implementing responsible supply chain practices.
- Professional Services (Consulting, Legal, Accounting, etc.):
- Offering pro bono services to non-profits and disadvantaged individuals.
- Providing strategic consulting for social enterprises and impact-driven businesses.
- Promoting corporate social responsibility and ethical business practices.
- Assisting in legal matters related to social justice and human rights.
- Advancing financial transparency and accountability in the non-profit sector.
- Tourism and Hospitality Sector:
- Promoting sustainable tourism practices and minimizing environmental impact.
- Supporting local communities and businesses through responsible tourism.
- Preserving cultural heritage and promoting cultural exchange.
- Engaging in community-based tourism initiatives to benefit local economies.
- Investing in employee well-being, fair wages, and diversity in the hospitality industry.
Some useful frameworks and resources for social impact
These resources offer guidance, tools, and frameworks that businesses can utilise to measure, evaluate, and communicate their social value impact.
SROI is a framework that quantifies the social, economic, and environmental value generated by an organisation, helping businesses understand and communicate their social impact in monetary terms. It offers guidance and resources for implementing the SROI approach in the UK context, making it a valuable tool for measuring and evaluating social value.
The B Impact Assessment is useful for businesses seeking to measure and benchmark their social value impact and pursue B Corporation certification.
The Social Value Act is a UK legislation that requires public sector organisations to consider social, economic, and environmental value when procuring goods and services. If you are considering or are currently part of the supply Chain in government tenders, this will be important to review and understand.
The Outcomes Matrix, available through Good Finance, is a tool that helps social enterprises and impact investors define and measure the outcomes they aim to achieve. It provides a structured framework for articulating social impact, aligning activities, and monitoring progress.
The Global Reporting Initiative (GRI) offers a globally recognised framework for sustainability reporting, including social impact. The GRI UK website provides access to GRI reporting standards and resources tailored to the UK context.
The National Themes, Outcomes, and Measures (TOMs) is a framework developed by the Social Value Portal that provides a standardised set of metrics for measuring social value. It helps businesses and organisations identify and quantify social value across different sectors and activities.
Understanding and measuring social impact is an ongoing process that requires continuous evaluation and adaptation. By embracing this journey, businesses can not only maximise their positive impact on society but also drive meaningful change for a better tomorrow.
If you need support with this – Get in touch with us at Contact Us – Sustainable X