What are the most effective ESG performance metrics for measuring social impact?

Social Impact Metrics: Diversity & Inclusion: Assess workforce makeup and equal opportunity practices. Employee Satisfaction: Measure employee wellbeing and engagement. Community Initiatives: Track impact on community welfare and development. Occupational Safety: Monitor adherence to health and safety standards. Skill Development: Evaluate investments in employee training and growth. Fair Labor Practices: Ensure fair wages, working hours, and treatment. Sustainable Supply Chain: Assess supplier diversity and social responsibility. Human Rights Compliance: Verify adherence to human rights standards globally. Philanthropic Impact: Track charitable giving and community engagement Product Impact: Evaluate social impact of products and services

The main ones I've come across, are these: 1. Complexity of Impact: Social impact is often multifaceted and not easily quantifiable. It involves diverse stakeholders, indirect effects, and long-term outcomes that are challenging to measure and attribute to specific interventions or actions. 2. Attribution and Causality: Determining causality and attributing specific outcomes to an intervention or initiative can be challenging. Multiple factors often contribute to a social change, making it difficult to isolate the impact of a single intervention. 3. Ethical Considerations: Ethical concerns regarding data collection, privacy, and the potential unintended consequences of impact measurement strategies need careful consideration.

To me, metrics are only important if they are valuable to your stakeholders. Hence, stakeholder engagement is important to find out what matters to your stakeholders. We should then use social impact metrics as a means to gauge if we are getting further/nearer to meeting the needs of our stakeholders. Ideally, the metrics should be quantified, if not at least qualitatively discussed. Overall, the metrics should not be collected for the sake of collection but we must see the meaning.

One challenge my clients have faced is when they to take a one-size-fits-all approach to deciding which social impact metrics they will use. Looking to external case studies can be helpful to form benchmarks, but these should always be relevant from an industry and size perspective. Only then will companies be able to establish appropriate benchmarks and action on them in the future.

Community Engagement is an important metric that measures the company's involvement in the local community, including charitable donations, volunteer work, and partnerships with local organizations. It reflects the company's commitment to social responsibility.

Any entity can conduct an internal sustainability assessment led by its dedicated sustainability and ESG team. Essential ESG metrics include monitoring workforce diversity and evaluating employee satisfaction. For measurable community investment impact, factors like the value of social responsibility program allocations (determined by the Board of Directors divided by retained earnings) are crucial. Critical considerations also involve aligning supplier practices with social impact goals, scrutinizing policies related to human capital and fair employment, monitoring workplace records for positive health and safety impacts, and evaluating how products or services contribute to addressing social issues.

Lots of different ways ? Start with net results, eg Volunteered hours, emission reduction percentages, or number of funded initiatives should probably be measured against quarterly or annual goals. ? You can use Net promoter score, how likely the community is to recommend the company to their family or friends? ? Important to include diversity, equity & inclusion metrics. From board level, senior management, promotions etc ? Outreach metrics & topics that link to social purpose, such as education, how you support the community or recruit locally. ? Open feedback via interviews, general surveys, open questions, personal experiences. Quality of the collected data most useful to understand real impact within your community.

External standards like the B Impact Assessment or those from the Sustainability Accounting Standards Board can be a great starting place to identify the right tools to measure your social impact. For companies just starting to explore this area, don't be afraid to research a variety of standards and assess the impact that each one offers. Even if you only choose to report to a certain framework, you can pull metrics from other standards to supplement your internal information gathering.

In evaluating social impact on stakeholders like employees, customers, and community members, the three most effective metrics for measuring corporate social impact (from my prespective) are: 1. Quality of life improvement (measured through before-and-after surveys). 2. Accessibility to basic, necessary, or beneficial products or services previously unavailable. 3. Increased levels of innovations within members of communities. (the number of innovations produced by community members as a result of company efforts/tools/hubs created to encourage innovations).

Evaluate sustainability practices of suppliers, prioritize fair labor conditions, & minimize environmental impact within the supply chain. Measure customer satisfaction with products & services, & assess positive social impact through surveys, case studies, & user feedback. Track the number of individuals & communities provided with access to education & training programs, & measure their skill development & career advancement. Quantify the impact of healthcare & wellbeing initiatives on employee & community health, including access to healthcare services & health outcomes.

The best way to derive value from your social impact initiatives is to know your company and your audience. If there is a disconnect between your company's identity and your social impact initiatives, they may come off as inauthentic or "purpose washing." Once you've established an approach to social impact that aligns with your corporate values, you then need to communicate these efforts to your audience in a clear and transparent manner.