To measure social impact, we could start by using the tools we already have

Article by Shamina Singh: “…To measure social impact, we could start by using the tools we already have.

In the environmental context, companies have adopted the Greenhouse Gas (GHG) Protocol, which tracks the full spectrum of a company’s carbon emissions. The first scope accounts for direct emissions from its operations, the second relates to indirect emissions from energy purchased by the company, and the third tracks indirect emissions from a company’s entire value chain.

At the Center for Inclusive Growth, we have been thinking about how to capture social impact in a similarly methodical way. Just as the environmental framework is tied to the level of control over the source of emissions, we could account for the level of control in social impact. I’ll offer up the following framework to show how our team is thinking about this challenge, so we can help spark a dialogue using the following as a conceptual starting point.

The first scope could cover each company’s approach toward its own employees, since companies have a direct influence on this stakeholder group through workplace investments, programs, and corporate culture. This category could assess pay equity, diversity within leadership ranks, talent development and career progression for underrepresented groups, labor standards, and more. Many companies already track these metrics.

Then, the second scope could look at how companies leverage their core competencies, deploy their products and services and work within their supply chains to help address societal challenges. Companies have skills, technologies, and capital that can create widespread social benefits, and many are already leading the way. The activity in this second category involves stakeholders at a level of control that is less direct than the first, such as customers and suppliers.

Finally, philanthropic giving, volunteering, and other community investments would comprise the third scope. This level of control is distinct from the second scope because company resources are entrusted to other entities that make decisions about how it’s spent. These efforts, while indirect, can strengthen a company’s brand and reputation, cultivate innovation and opportunity, and generate significant societal value.

From there, it’s about measuring the outputs of our investments in all three scopes. A system of accountability for follow-through is vital because when it comes to improving people’s lives, communities, and futures, outcomes matter-not just effort.

There is so much good work happening in the social impact space, but much more work to be done to measure it. To incentivize continued progress, we have to start quantifying the impact, even if the best way to do that looks different across companies or industries…(More)”