C. Measurement Capacity

3. Measuring Social Sustainability

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Social sustainability is a measure of an organization’s impact on the well-being of people and communities. Unlike measuring economic sustainability, measuring social sustainability is a relatively new discipline and has only recently started to gain traction.1

Social sustainability can be very complicated to measure; most factors that affect society are difficult to isolate and quantifiably measure. So, although measuring social sustainability is advancing, there has yet to be a set of widely-accepted standards established.2

For a free tool to help your organization understand the value and scope of Social Impact Assessment click here  icon_free-tools_16x16

Overview

The advancement of measuring social sustainability can be traced to several key initiatives and organizations. Some of that history is highlighted below through a brief examination of Social Impact Assessment and Social Return on Investment, two of the more internationally recognized approaches developed for measuring social sustainability.

Social Impact Assessment (SIA):  The International Association for Impact Assessment (IAIA) defines Social Impact Assessment as follows:

Social Impact Assessment includes the processes of analyzing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions.

To learn more about The International Association for Impact Assessment click here  icon_library_16x16

To learn more about the core values of the Social Impact Assessment community click here  icon_library_16x16

Like many movements, the origins of SIA are not traceable to any single event, but rather, a number of events that seemed to gradually move the conversation forward. One such event was the introduction of the National Environmental Policy Act of USA (1970), which had an emphasis on simply disclosing impacts to the public. Alongside that Act, the world saw the introduction of a new international law – the Law of Free and Prior Informed Consent (FPIC). The law was based on the principle that communities should have the right “to exercise control, to the extent possible, over their own economic, social and cultural development.” 

Those “informing the public” type laws and principles laid the foundation for social responsibility – that a business, non-profit, or government is accountable for their impact on society. Applying SIA involves mapping unintended consequences of an organization’s actions and allowing for alternatives to be proposed that would mitigate negative impacts. Over time, and especially more recently, the model’s adoption has modestly expanded internationally.

To learn about the Social Impact Analysts Association, an organization that specializes in Social Impact Assessment and offers resources training and more on SIA click here  icon_organizations_16x16

To learn about the Social Impact Assessment (SIA) Hub, an organization that has built a global community of Social Impact Assessment practitioners and offers an interactive forum click here  icon_organizations_16x16

For a free tool to help your organization conduct a Social Life Cycle Assessment of products click here  icon_free-tools_16x16

Social Return on Investment: SROI guidelines have emerged to support the measurement of non-financial impacts against the resources invested. The guidelines can be applied by companies, investors, non-profits, funders and governmental entities in a similar fashion to how accounting and financial valuation is performed. Olsen & Lingane define SROI as:

“Social Return on Investment (SROI) analysis is the set of practices necessary to generate meaningful SROI figures [namely a ratio of the net present value of benefits to the net present value of the investment] and other quantified social metrics.”

SROI was developed by the Roberts Enterprise Development Fund (REDF), a San Francisco-based venture philanthropy fund. REDF applied SROI methodology to non-profit organizations in its portfolio that operated social enterprises with the explicit mission of employing people with the most significant barriers to potential employment.

To learn more about the Roberts Enterprise Development Fund click here  icon_organizations_16x16

Ultimately, SROI provides a consistent quantitative approach for understanding and managing impacts on stakeholders that go beyond traditional economic valuation techniques. Where possible, it also attaches a financial value to the key outcomes anticipated, enabling an associated economic benefit to be calculated.

To learn more about SROI click here  icon_library_16x16

As interest in measuring social performance has expanded, communities began to form that were designed to share information and develop a consistent structure and methodology for SROI. In 2006, a book was released, Social Return on Investment: A Guide to SROI. Shortly thereafter, the UK government’s Office of the Third Sector and the Scottish Government launched a project to advance the guidelines established, which has been instrumental in further defining the SROI methodology and creating a framework for implementing SROI analyses.3

There are many other organizations, systems and protocols that are shaping how social impact is being measured. Examples include the ISO 26000 certification, bLab and the bCorporation certification and the UN Global Compact Standards.

To learn more about the ISO 26000 standards which provides guidance on how to operate in a socially responsible way click here  icon_library_16x16

To learn more about the United Nations Global Compact Standards click here  icon_library_16x16

Overall Social Sustainability

At its simplest, social sustainability is a function of how an organization’s operation affects the well-being of all stakeholder groups it impacts.  A socially sustainable organization would only enhance the well-being of the stakeholders they affect, within and beyond the organization. Addressing social sustainability essentially involves being responsible for the effect of all relationships the organization has with people, regardless of whether or not they wanted or intentional, and limiting any negative impacts generated. 

Sources of Social Impact

Because addressing social sustainability is still a relatively new discipline, there is little consistency in how sources of social impact are broken down and categorized among the recognized systems just described above. In addition, from labour practices to human rights, the list of potential social impacts can seem endless. In comparison to sources of economic impact, the applicability of sources of social impact is much more subjective and likely to vary based on the organization. The following is a collection (again, not exhaustive) of sources of social impact that an organization may consider:

Labour Practices and Decent Work

  • Employment Levels.
  • Wages and Benefits.
  • Job Security.
  • Labour / Management Relations.
  • Occupational Health and Safety.
  • Training and Education.
  • Diversity and Equal Opportunity.
  • Equal Remuneration for Women and Men.

Human Rights

  • Investment and Procurement Practices.
  • Non-discrimination.
  • Freedom of Association and Collective Bargaining.
  • Child Labour.
  • Forced or Compulsory Labour.
  • Security Practices.
  • Indigenous Rights.
  • Assessment.
  • Remediation.

Society

  • Local Community.
  • Corruption.
  • Public Policy.
  • Anti-Competitive Behaviour.
  • Compliance.

Product/Service Responsibility

  • Customer Health and Safety.
  • Product and Service Labelling.
  • Marketing Communications.
  • Customer Privacy.
  • Compliance.

Again, not every source of social impact will be relevant to every organization, but it is important to consider as many as possible to avoid overlooking the most significant ones. As far as building a strong and sincere sustainability program goes, it is critical to focus on examples that have the potential to generate a meaningful cost or benefit.

For example, most organizations have employees and will choose to examine sources of impact like diversity and occupational health and safety. On the other hand, unless it’s part of an organization’s core mandate, very few will find value in being able to measure a source of impact like forced or compulsory labour.

Context for Developing Measurement Capacity

What’s most important is that the capacity being developed is generating meaningful data. As part of establishing what is meaningful to an organization, it is important to consider all internal and external stakeholders in identifying what measures are relevant. As was described within the Change Management section, it is important to both identify and carefully define each stakeholder group impacted by the organization. Clearly understanding each group will help determine the depth of social measurement capacity that is most valuable. Putting the effort into defining what is most important to measure will ensure right measurement capacity is developed.

Social Measurement Progress & Limitations

Changing culture around social responsibility has propelled measuring social sustainability forward. That said, it remains a rather immature discipline practiced by few organizations. One example of how this has manifested itself among organizations is the creation of the Benefit Corporation. B Corps, as they are commonly known, are organizations certified based on having met rigorous standards of social and environmental performance, accountability, and transparency. As of 2015, there is a growing community of more than 1,200 Certified B Corps from 38 Countries and over 120 industries working together toward one unifying goal: to redefine success in business. In some countries, the B Corp is a unique and legally recognized entity. The Fair Trade movement, which attempts to ensure equitable treatment of workers – mostly in farming livelihoods, is another example of a growing awareness of social benefit and impact tracking.

To learn more about B Corps click here  icon_organizations_16x16

Although there may be shining examples of how measuring social sustainability is taking shape, both companies and communities frequently lack real understanding of the benefits it can lend. 

Footnotes

1. To learn more about what social sustainability is, Sustainability Illustrated has a great 6 minute video that explains basic human needs. You can find the video here.
2. To gain a broader knowledge on the measurement of Social Sustainability, there is a book called Sustainable Measures by Martin BennettPeter James and Leon Klinkers (1999) that has collected most of the key work and individuals concerned with the topic from around the world. 
3. More information on the UK and Scottish Government’s project to advance the SROI project here: http://www.socialimpactscotland.org.uk/


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