The success of a business encompasses more than just the financial data that acts as proof of its success. Products and profits don’t paint the whole picture, it takes more and many of the measures of success go beyond financial matters. However, the social impact a business has on a community can affect the bottom line of a business and much more. This is why social impact assessment used as a sustainability performance measurement method, can have a huge impact on operational sustainability.
This is the piece of the puzzle that evaluates the practicality of a business maintaining its current practices without placing a negative risk on future resources and the community.
Measuring Social Performance.
It’s no secret that businesses have always focused on their economic bottom line. This has been the accepted measure of success historically. The measure of a business’s social performance indicates a new era in the success profile of a business, with a focus on sustainability. Businesses are now more concerned with the balance and complement of the people, planet, and profit. A focus on sustainability represents the next evolution of good business practices.
The Difficulty in Measuring Social Performance.
However, social performance can be difficult to measure if a business doesn’t have any set standards in place. The fundamental questions become, what value can be put on social programs implemented by a business and its employees collectively. Should an employee’s individual volunteer efforts be measured? Should there be a focus on the programs a business may create to help the community? However, regardless of the activity, the company has to get in the habit of measuring its success. Hypothetically speaking, social impact and sustainability should be measured when baling cardboard or conducting a fundraiser in the community. It doesn’t matter.
How can a business create standards in order to measure their social performance and what should those standards be?
Some companies have begun to follow the London Benchmarking Group as a way of creating standards to measure their social impact and performance. In academia, complex theories have been created to develop social impact assessments for large companies like Unilever. However, it’s often a challenge to separate social impact from economic impact because they are often closely intermingled.
Any company truly interested in sustainability will have to create standards to measure this new metric. More often than not, those standards are based on the existing company visions and goals. The measurement of sustainability must be a priority and a measured metric just like financial success.