Measuring Socio-Economic Impact : Tackling some tough questions
When interacting with members and partners of the World Business Council for Sustainable Development (WBCSD), several questions about how to tackle the challenge of measuring socio-economic impact often come up.
These include :
- How should I articulate the business case for measuring a company’s socio-economic impact?
- Can I get a brief overview on the terminology and theory in this space?
- What are the main tools available tailored to business needs?
- How can we advance the practice in the years to come?
During the past few years, we have assembled many opinions, insights, and thoughts on those questions and others. As a result, we decided to synthesize the insights we have gained into a guide, which we launched last week, with the goal of supporting companies’ work in this domain.
We compiled the guide to help businesses perform three essential tasks:
- Define and articulate the business case for socio-economic impact measurement within their organization, based on four pillars: maintaining the license to operate; improving the business enabling environment; strengthening value chains; and, fueling product and service innovation.
- Understand the essentials of impact measurement theory, and communicate with internal and external stakeholders on the subject – including on the terminology.
- Navigate the landscape of measurement tools, and identify those that best meet companies’ needs. The guide profiles 10 existing tools tailored to business needs, dissected on the basis of functionality, fit for purpose, cost and complexity of implementation, and examples of their application in practice.
We are aware that the landscape of tools is still evolving. The guide is therefore intended to be a living document, updated and improved as existing tools are updated and new ones emerge.
In the last section of the guide, we also lay out what we see as the two major opportunities to advance the practice of socio-economic impact measurement:
- Integrating socio-economic impact measurement into business performance management and reporting. To achieve this, we need to redesign the scope of corporate strategy and processes across measurement, management, and reporting.
- Using socio-economic impact measurement to drive more effective collaboration between business, government, and civil society. A better understanding of industry perspectives, in particular, can highlight strategic drivers of the socio-economic impacts of companies in a particular sector, geography or environment, and the pathways through which that impact is created. This helps prospective partners understand what companies’ highest-potential impacts are, where they come from, how they unfold, and what can be done in partnership and at scale to mitigate or leverage them.
The WBCSD team is eager to accelerate business efforts in the measurement domain. We know that scaling up solutions to sustainability challenges will not happen without a solid understanding of what works and what doesn’t. Having sound measurement systems in place is fundamental to obtaining this insight.
We look forward to receiving feedback from the Next Billion community. For any comments, questions or suggestions on the content of this guide, or to share your experience in applying one or more of the tools portrayed, please contact us at measuringimpact@wbcsd.org.
We are also going to co-host (along with the Aspen Network of Development Entrepreneurs – ANDE) an event on this topic in Washington, DC on March 27. More details will follow soon.
The guide is available for download at http://www.wbcsd.org/impact.aspx. In addition to the guide, the website features a 3-minute animated video (embedded below) and a slide show summarizing the content and main messages.
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