How do you define and measure the social impact of your business activities?

1 Why measure social impact?

Measuring social impact is not only a way to demonstrate your commitment to CSR, but also a way to improve your business performance, reputation, and value. Through measuring social impact, you can identify and manage the risks and opportunities associated with your social and environmental impacts, communicate and report your findings to stakeholders, learn from results and feedback to inform decision-making and strategy, and even innovate and differentiate your products and services. This can create a competitive advantage for you in the market.

2 How to define social impact?

Before you can measure your social impact, you need to define it. This involves clarifying what social impact means for your business, your goals and objectives, and the indicators and metrics that you will use to track and evaluate your progress. To do this, you should conduct a stakeholder analysis to identify who is affected by or interested in your business activities and what their needs and expectations are. Additionally, a materiality assessment should be conducted to prioritize the social and environmental issues that are most relevant and significant for your business and stakeholders. After this, a social impact framework should be defined that shows how your business activities lead to outputs, outcomes, and impacts for your stakeholders. Lastly, select the social impact indicators and metrics that will be used to monitor and report your social impact.

3 How to measure social impact?

Once you have defined your social impact, you need to measure it by collecting and analyzing data on your social impact indicators and metrics. To do this, you should plan your data collection by deciding which sources, methods, tools, and resources to use. Then, collect your data while ensuring its quality and validity. After that, analyze the data to identify patterns, trends, and insights. Finally, report your data analysis results and highlight your achievements, challenges, and learnings.

4 How to use social impact measurement tools?

There are many tools and frameworks that can help you measure your social impact, tailored to your needs, preferences, and resources. The Global Reporting Initiative (GRI) is a widely recognized set of standards and guidelines for sustainability reporting, covering various social, environmental, and economic topics. The Social Return on Investment (SROI) is a method for calculating the social value of your business activities by monetizing the outcomes and impacts for stakeholders. The Impact Management Project (IMP) is a global network of practitioners and experts that provides principles and practices for measuring and managing social impact. Additionally, the B Impact Assessment (BIA) is a tool for assessing and improving the social and environmental performance of your business, with the possibility to certify as a B Corporation.

5 How to improve your social impact measurement practice?

Measuring your social impact is an ongoing process of learning and improvement. To enhance your practice, review and update your social impact framework, indicators, and metrics in line with evolving goals, objectives, and stakeholder expectations. Involve stakeholders in data collection, analysis, and reporting processes, and benchmark and compare your results with peers, competitors, and best practices. Utilize the results to guide your business strategy, operations, and innovation to create positive change for stakeholders and the society.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?