Constructing the value of social impact
Chris Farrell, managing director of Impact Reporting discusses the importance of reporting on social value in the construction sector
Social value is often generated by construction firms funding charitable projects, launching a foundation, organising volunteering projects and introducing sustainability initiatives.
‘Social value’ and ‘social investment’ have become buzz words within the construction sector as more and more firms have a growing awareness that they need defined social, environmental and sustainability goals.
The frameworks and methodologies associated with social impact measurement may differ between organisations and sectors, however some key themes are pertinent across all sectors. For example, analysing common inputs – money invested in charities, time spent volunteering, or trees planted – is often balanced with common outputs – jobs created, lives saved, and carbon emissions prevented.
Social value is often calculated as a ‘Social Return-on-Investment’ (sROI), which relates to the perceived societal value of an organisation’s impact. It is important to be aware of the qualitative data – the narratives and experiences – that also exist. These are often overlooked but are an effective way of contextualising your impact and humanising reporting about your corporate social responsibility (CSR.)
Capturing accurate data
CSR is drastically influencing business behaviour in the construction sector and increasingly being seen as an effective and responsible strategy for setting organisations apart. This is reinforced by the expectations of consumers and employees and their ever-growing want to engage in pro-social initiatives. However, to get to a point where you are truly trusted by prospective customers and seen as a desirable employer, the clear measuring and reporting of your impact is imperative.
Employees need to understand why they are engaging in a social or environmental project and whether the outcomes have contributed towards the business’s purpose. They want and expect transparency. It’s important to reflect on your current business behaviours to understand if all stakeholders are working towards a common goal and if your CSR budget is being allocated efficiently.
How social impact is recorded, analysed and reported is just as important as how it is created – the information you get out is only as good as the data you put in.
Updating and quantifying data live is crucial. It’s already standard practice for HR, sales and financial data to be captured robustly and accurately in real-time – and now the norms for social value data capture are catching up. Google Analytics, Xero, SalesForce, and intranet systems are all updated live, and reports can be gathered at the click of a button, without the hassle of manually compiling data from multiple sources. In short, having all social value data feeding into one central database is advantageous as it allows for regular updates.
The benefits to firms
It’s important to make the analysis of your social responsibility an ongoing requirement, and refrain from solely relying on an annual report. Modern software is making this not just possible, but practical, taking in feeds from CRMs and intranets and calculating social value in real-time.
Construction firms must ensure their organisational purpose – rather than monetary metrics – drives their CSR strategy. All forms of CSR activity should be encouraged, however, if you only invest exclusively in activities that produce a high ROI you are in danger of ignoring other projects that may be more valuable in the long run or provide a broader range of benefits to society.
It’s easy to pay lip-service to social value and not be truly committed, however eventually your stakeholders will see through this. The real and rewarding challenge comes when you take control of the agenda, using strong figures to support your decisions.
Driving with purpose-first means that decisions reflect the preference of the end-user or community you want to help, rather than the needs or whims – or indeed quotas – of the executives. To truly understand whether you are making a difference in communities, you need more than high-level figures; you need stories driven by real people.
Reaching the right goals
Quantifying social value in an accurate and consistent way is key for all organisations. Aligning to and supporting the Sustainable Development Goals (SDGs) – 17 global goals set by the UN in 2015 – is a straightforward and ethical way of benchmarking the impact of many value-based businesses. These are a blueprint to achieve a more sustainable future and address global challenges related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice.
Aligning to the UN’s SDGs because of their worldwide and future-proofed applicability is important. Organisations track and report their pro-social and pro-environmental activities according to which SDGs they contribute towards – to provide structure and help employees understand the greater goals they are helping to achieve.
Indeed, given the vast array of activities that organisations can carry out, it is not surprising that many of these cannot be understood in simply monetary terms. To focus strictly on this approach, and to exclusively report on quantitative data, organisations are missing an opportunity to truly understand the scope of their impact. It’s about the long-term difference an organisation is making to the lives of real people and environmental sustainability.
The power of social investment
Social value aids construction firms by making them more efficient and leads to higher engagement amongst employees. Delivering social investment initiatives are crucial for businesses which impact on the environment and society. It will be an interesting journey ahead as CSR becomes increasingly central to the success of the financial sector.
Demonstrating a social impact is not a legal obligation for all sectors but that doesn’t mean construction organisations shouldn’t celebrate the good work they do. We’re at the beginning of monitoring and truly understanding the value of social impact but with the ease of access, and cost-effectiveness of digital media, this behaviour is becoming commonplace across almost all construction firms regardless of size.