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5 tools to measure the social impact of

companies
Albert Vilariño Alonso Follow
Jul 22 · 5 min read

Note: This article was .rst published in Spanish and can be found here.

The sentence “what is not measured does not exist or can not be improved”
is especially important and interesting when dealing with the measurement
of the impacts of companies in their environment.

Beyond the discussion of whether the phrase is more or less true or

applicable, one thing is clear and is the di)culty that organizations often
have to quantify, assess and draw conclusions from their actions and
activities related to corporate social responsibility and their eCorts to
contribute positively to society.

To assess these impacts, there are several tools that the Forética Social
Impact Cluster has included in the guide “Midiendo el valor del Impacto
Social Empresarial. Guía de herramientas de medición y valoración del
Impacto Social Empresarial” recently published.

The measurement of this social impact will help companies to account for
their social performance, externally value their contribution to society,
improve strategic decision making and the management of expectations and
results, and generate greater credibility in groups of interest such as
customers, suppliers, investors or public administrations.

The social impact has already entered the business

agenda
While in the environmental .eld there are already more standardized and
consolidated measurement strategies, in the social .eld there is no
consensus nor a single frame of reference, even existing methodologies
with more than 20 years of existence.

All these methodologies have particular approaches, scopes and processes

that must be adapted to each speci.c company and at the same time it
makes it diOcult for them to be used to establish comparisons of results and
therefore be adapted as standards.

In addition, some organizations more concerned with these issues have

developed their own measurement tools by developing existing ones.

Because all of this, it can be said that the social impact has already entered
the business agenda.

For example, investors are integrating with great interest these impact
metrics in their business models and in the valuation of investment
opportunities.

The rapid growth of impact investment stands out in this area. which
includes within its expectations of return, in addition to the .nancial,
variables of environmental and social impact.

This social impact is also being integrated into public procurement and the
concession and .nancing of large investment projects.

The public administration thus tries to have greater traceability on their

projects, promote the social value of them and contribute to the
improvement of the impacts.

The companies subject to this type of operation are the ones that, for the
moment, are leading the eCorts to develop measurement models and
metrics that are increasingly more advanced.

The communities themselves also consider that they are interested in

companies advancing measurement models that allow them to know and
understand what the impacts of the activity are in the environment, since in
this way they can control the process, legitimize their actions and
contribute to the improvement of it.

Challenges and opportunities of measuring social

impact
The methodologies for measuring social impact are still at a stage of
incipient maturity, even in those organizations with greater exposure to
the agents of change already mentioned.

Measuring social impact faces challenges, but also generates new

opportunities.

Among the main challenges we .nd consequences of its novelty, such as

the absence of a measurement model considered as standard and that is
simple at the same time, the lack of management objectives in the .eld of
measurement, or the lack of knowledge in the organizations for its
implementation.

Also other challenges already existing in other areas of business

management such as the lack of time and resources to devote to the
measurement process, or the diOculty of obtaining and analyzing the data
and material indicators.

On the contrary, as opportunities, the measurement of impact can bring

about improvements in the reputation and external recognition and
internal management, the generation of new business opportunities, the
generation of a common culture and a shared purpose, or the contribution
to Sustainable Development Goals (SDG).

Speci8c tools for speci8c cases

The Forética guide presents 8ve di9erent tools for the measurement of
social impact, based on what it is speci.cally intended to be used for and to
which interest group the result of the measurement will be directed.

The SDG Compass has also been added, although it is not a tool for
measuring and assessing social impact, but it is relevant when assessing the
contribution and impact of organizations in achieving the SDGs.

The Social and Human Capital Protocol is a methodological framework

developed by the World Business Council for Sustainable Development
(WBCSD) and emerges to respond to the need to try to create a
homogeneous framework for the measurement and assessment of corporate
social impact.

Its methodology is composed of four diCerentiated stages (object, scope,

measurement and evaluation and application of results). It is a very
complete framework, applicable to diCerent sectors and industries, and can
be used in conjunction with other models of social impact measurement.

The second proposed international tool, the LBG Framework, is a model

for the measurement, management and communication of initiatives and
projects of strategic investment in the community or social action based on
an input framework (resources set by the company) and output (results
obtained through the inputs).

It is also a useful framework for the measurement, management and

communication of projects of third sector organizations, and is recognized
by the Dow Jones Sustainability Indices (DJSI) as a best practice to inform
the contribution to social action.

The Rockefeller Foundation, Acumen Fund and B Lab were the ones who
devised the Impact Reporting & Investment Standards (IRIS)
framework, characterized by being a catalog of benchmarks of performance
(metrics) that guide and help impact investors to know the social,
environmental and .nancial impact of an organization.

Its use is part of only one phase of the process of measuring social impact,
which includes the identi.cation of metrics or key measurement indicators.
Each of the performance indicators are selected by each organization based
on its measurement objectives.

For its part, the Social Return on Investment (SROI) is based on a purely
economic indicator widely used in the business environment called Return
on Investment (ROI) which includes the concept of social value (SROI), and
we .nd it of two types: the forecast SROI and the evaluation one.

It oCers a quantitative approach to understand and manage the impacts of

an organization, project or initiative, assigning an economic value to each of
the identi.ed social impacts.

SROI refers to the perceived social value (not so much the economic value),
which entails experiences, qualitative information, quantitative information
and .nancial information about the changes that have occurred as a result
of the results of an organization, project or initiative, thanks to which we
can support strategic decisions.

Finally, the Socio-Economic Assessment Toolbox (SEAT)was developed

in 2003 by the company Anglo American, and is an impact assessment
model applicable to all stages of mine development.

The tool is designed to identify and manage social and environmental

impacts from exploration to the closing of the operation, reYecting the
complexity of managing such impacts in large-scale extractive operations at
the local level.

Sustainability Social Impact Corporate Responsibility Sustainable Development

WRITTEN BY

Albert Vilariño Alonso Follow

Consultant in Corporate Social Responsibility, Sustainability,

Reputation and Corporate Communication,and integration of
people with disabilities.

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