Understanding Your Company’s Social Impact

Trinidad and Tobago continues to face a maelstrom of economic, social and environmental challenges. A sputtering economy which remains dependent on oil & gas revenues, high crime rates, embedded corruption, a worsening and complicated refugee crisis, ubiquitous land and marine pollution, creaking public infrastructure and institutions, a lack of public trust. The list makes for depressing reading.

No one is immune to these challenges, meaning everyone has an incentive to help solve them. Government, the private sector, NGOs and individuals all have roles to play. Many companies contribute through core business activities and CSR programmes, some more than others. However, only a handful actively measure what actually happens as a result of their contributions.

This matters. Not just from a communication perspective, but because of the old adage ‘what isn’t measured, isn’t managed’. How can you be sure your company is creating positive change if you aren’t making an effort to understand the impact it is having? How do you know your limited resources are being used in the most efficient and effective ways? This article seeks to answer some of these questions by describing what businesses can do to measure, communicate and bolster their efforts to help solve some of our country’s greatest challenges.

An introduction to Social Impact

According to the European Commission and the Organisation for Economic Cooperation and Development (OECD), social impact relates to the social value produced by for-profit or non-profit organisations. Usually, it is expressed in line with the following principles.

  • Value is created or destroyed as a result of activities of persons or organisations;
  • Value is experienced by beneficiaries and all others affected, including employees;
  • Impacts may be positive or negative; and
  • Impacts should be judged against what would have happened in the absence of the activity in question.

 

 

Local Operating Context

In a challenging economy, CSR budgets are guaranteed to feel the strain. The ability to measure and communicate the social or environmental benefits resulting from CSR programmes can go some way to relieving this pressure. This is not lost on the local business community. Several companies have started to think and communicate in terms of social impact. In its 2017 Sustainability Report, Atlantic LNG described how its business inputs and corporate strategy combine to create value for the local economy, communities and the business. It also reports on the number of individual beneficiaries of its community investment. NGC’s first Sustainability Report (2017) outlines how the company’s economic, social and environmental contributions help it achieve its vision of being a ‘leading player in the energy value chain, delivering sustainable benefits, through our people, for all stakeholders’. More recently, the Maritime Financial Group launched its Social Investment Strategy – Our Children, Our Future – which outlines focus areas and partner organisations, as well as the inputs and outputs that will be measured to track progress.

These efforts are laudable and should be encouraged. However, a word of warning. There are knowledge and expectation gaps between what organisations want and what they can realistically achieve in the short term. Few of the companies that want to measure their social impact have these skills in house, or have monitoring and evaluation processes in place to collect the data required. This is before even considering the significant challenges of counterfactuals, causality and attribution, which are fundamental components of robust impact measurement.

The reality is, unless your organisation has been measuring its CSR inputs and outputs and making use of the data in decision making and reporting (as a minimum), there is work to be done before it can think about measuring its short or long-term social impacts (the latter of which is substantially more difficult).

“Surely measuring impact matters, but we need to be realistic about the constraints. It requires a level of research expertise, commitment to longitudinal study, and allocation of resources that are typically beyond the capabilities of implementing organizations. It is crucial to identify when it makes sense to measure impacts and when it might be best to stick with outputs — especially when an organization’s control over results is limited, and causality remains poorly understood.”

Ebrahim. 2013. Harvard Business Review

Getting Started

Despite this, there are a number of steps companies can take to move towards impact measurement.

  1. Articulate the positive social or environmental impacts you wish to have and identify how you can boost your CSR programme’s ability to deliver these.
  2. Use tools such as Logic Models or Theories of Change to map how these impacts can be achieved and identify the potential inputs, outputs and outcomes.
  3. Determine what data is already available within your organisation or from NGO partners.
  4. Implement processes to collect the data you don’t already have access to, starting with input and output indicators.
Logic Models are tools used to describe the effectiveness of programs. They describe linkages among program inputs, activities and outputs, and short and long-term impacts. Once a program has been described by a logic model, critical performance metrics can be identified. They are relatively simple graphical depictions of processes that communicate the assumptions upon which an activity is expected to lead to a specific result (McCawley, undated).Theories of Change are more complex and robust than Logic Models, but there is no requirement they be used in their place. They provide a detailed description and illustration of how and why a desired change is expected to happen in a given context. In so doing, they map out how activities lead to desired goals being achieved (Center for Theory of Change, 2017).

Regardless of the approach you choose to adopt, it is worth keeping a few things in mind. Firstly, start small by identifying an existing CSR activity with a clear goal to use as a pilot exercise. Secondly, impact assessments that ignore associated negative impacts, either from the CSR activity or from the organisation’s operations, are incomplete. You should consider your negative impacts and ways to minimise them. Finally, remember that CSR activities may also positively impact your own staff through improved morale, enhanced skills and so on. In many cases these internal impacts manifest themselves in a shorter timeframe and are easier to measure, while having direct business benefits. As such, they may be a good place to start.

Things You Can Measure

The following are some of the things you should consider measuring as part of your CSR activities. They are not all impact related and this is not meant to be an exhaustive list. Additional information on these and other CSR disclosures may be found in international frameworks such as the Global Reporting Initiative (GRI), UN Sustainable Development Goals (SDGs), the UN Global Compact (UNGC), to name a few.

Area Performance Indicators
Tax Contributions
  • Corporation Tax ($)
  • Green Fund Levy ($)
Employment
  • Total staff (#)
  • Gender diversity of workforce and management (%)
  • Total salaries and benefits ($)
  • Training (hours, $ spend, % of staff)
Health, Safety and Security Leading and lagging indicators, including but not limited to:

  • Training
  • Contractor management
  • Near misses
  • OSHA recordables and their frequency
  • Occupational health and illness
Supply Chain
  • Number of local suppliers (#)
  • Spend on local suppliers ($)
Volunteering
  • Number of volunteering events (#)
  • Number of employee volunteers (#)
  • Total volunteering hours (hours)
  • Value of hours spent volunteering ($)
Financial and In-Kind Donations
  • Number of beneficiaries (#)
  • Value of cash and in-kind donations ($) (sponsorship is not considered CSR, it is marketing)
Environment
  • Resource consumption (e.g. energy in kWh/mWh, water in m3)
  • GHG emissions (tonnes of Carbon Dioxide – tCO2e)
  • Total waste generated (tonnes)
  • Recycling diversion rate (%)

This article is not meant to discourage companies that want to understand their social impacts. It aims to highlight common challenges and misconceptions, while providing practical advice on how to move forward. After all, ‘what isn’t measured, isn’t managed’ and Trinidad and Tobago’s challenges are in urgent need of proper management.

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