67% of corporate sustainability professionals who responded to an Ethical Corporation survey said their company “measures social and/or economic impact of their business on the communities where they operate”.
This positive response astounded the 100 corporate sustainability professionals who turned up in London for a debate where Ethical Corporation shared its preliminary results for an upcoming report on "Social and economic impact: measurement, evaluation and reporting."
Are companies actually concerned with their impact on society?
The company delivered a second anonymous survey, asking a similar question: “Has your company conducted a study of the social or economic impact of your operations on a local community?” Again, an affirming 69% of respondents answered yes.
Companies are beginning to realise that corporate sustainability is about much more than being green, despite a hazy understanding of exactly how social and economic impact studies benefit their business.
73% of respondents indicated that communication of their business impacts is one of the main reasons for conducting the studies. Yet a growing number of companies are using the studies more strategically.
71% of survey respondents said that the results of impact studies directly affect their business strategy.
Ethical Corporation’s report presents four distinct impact models, explaining the business reasons for conducting studies and exactly how the studies benefit their bottom line.
Supply chain management - The continuing propensity of labour rights campaigns against some well-known companies such as Nike, Gap and Primark has meant that ethical management of the supply chain has become fairly wide-spread practice.
External reporting standards – Companies now seek to meet industry benchmarks and guidelines offered by voluntary initiatives. These initiatives are increasingly demanding measurement beyond performance, so that companies can monitor actual societal impacts and the root cause of community challenges.
Site-level community impact - Increasingly, companies with a strong physical presence and reliance on a local community are implementing processes to understand and manage this site/ community impacts.
Socio-economic impact assessment - A small number of companies are beginning much more systematically to understand how their activities impact on the overall development trajectory of the countries where they operate. Findings inform corporate strategy, and result in outcomes such as innovation of new, sustainable products that respond to a local market demand.
This final approach is still in its infancy, and is posing challenges in terms both of attribution of impact, and in developing relationships with new partners. Nonetheless, this approach is a highly significant development not just in terms of the ‘technology’ of assessing impacts on society, but also in how companies see their very role within society.
The business objectives, location and industry determine the appropriate model for a company.
Contact:
Pamela Muckosy
Head of Research
+44(0) 207 375 7554
Report summary is available at: www.ethicalcorp.com/impact