What is Social Impact
In light of a changing business environment and increased regulations, organisations need to understand the impacts of their strategic decisions. This is of utmost importance to demonstrate the beneficial impact of their activities, evaluate investment options and develop partnerships.
To do this they need to have a clear understanding of their direct financial effects but also the wider economic, social and environmental impacts of their activities.
Longevity Partners measures, manages and attributes a financial value to these three key areas, providing clients with a holistic overview of how their business decisions have a wider effect on stakeholders and the global society.
Since the latter part of nineteenth century, companies have monitored their activities, made their decision and published to board and investors only on financial metrics. Whilst knowledge of corporation has expanded on their dependencies and impacts on their global environment, few of them integrate extra-financial aspects in addition to financial ones in their decision process and reporting.
Why Social Impact?
A Social Impact approach to making strategic decisions provides the holistic perspective a business needs to understand risk, identify opportunities, and optimise its contribution to society.
Social Impact Measurement allows decisionmakers to effectively measure, understand and compare the trade-offs between different business options, such as investment, refurbishing, renovating, operating and all other business decisions. And, ultimately, allows them to make better impact-related decisions and understand how those decisions affect their stakeholders and assets.
How can Social Impact benefit you?
Environmental, social and governance issues are increasingly seen as interrelated, and reflective of a companies’ management quality and level of risk. Alarming statistics estimate that annual environmental costs from global human activity stood at US$ 6.6 trillion in 2008 (11% of GDP) make it increasingly difficult for investors to ignore the costs of externalities and their impact on shareholder value.
Without measuring the environmental and social implications of a companies’ operations, it is very difficult to deliver sustainable shareholder value. In practice, this means being able to quantify, understand and compare the pros and cons of different business decisions – to ensure that informed decisions are made.
The Social Impact approach offers numerous benefits to a business, helping companies to identify and manage their risks more effectively. It also provides more insights than conventional financial reporting and identifies new business opportunities. Measuring the social impact furthermore demonstrates the value a business creates for its stakeholders, enhancing its reputation, and helps answer the question of whether a strategy will deliver sustainable shareholder value in the changing business environment.
How can Longevity help you?
From pre-analysis, measurement and review to monitoring, management and control, our team of specialists are dedicated to ensuring that all aspects of a client’s scope of impacts are considered with the utmost care, providing a truly holistic approach to Social Impact Reporting.
In practice this means:
- 1. Measuring the effect of business activity on the social and economic characteristics of a given area, by measuring changes in performance and engagement of employees, socio-economic impacts on (local) employment, employees’ satisfaction of their building environment, etc.
- 2. Valuing the impact a business has on natural capital via air, land and water pollution as well as the use of natural resources;
- 3. Valuing a business' financial contribution to local and national government, through socio-economic impact on employment and tax impact measurement.