Measuring Double Materiality: Focus on Social Impact

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September 2, 2024

Example: FreshDrink Co. Social Impact Measurement

Let's consider how FreshDrink Co., our hypothetical beverage company, might measure its social impact:

  1. Social Return on Investment (SROI): FreshDrink Co. invests $1 million in a clean water project in a community where it sources ingredients. The project provides clean water to 10,000 people, reducing waterborne diseases by 60%. The company calculates that this health improvement saves the community $3 million in healthcare costs and lost productivity.SROI = $3 million / $1 million = 3:1
  2. Impact Mapping: FreshDrink Co. maps how its farmer support program leads to:
    • Output: 500 farmers trained in sustainable agriculture
    • Outcome: 30% increase in crop yields
    • Impact: 20% increase in farmer household incomes
  3. Stakeholder Surveys: The company surveys local communities near its production facilities:
    • 85% report improved access to clean water
    • 70% perceive FreshDrink Co. as a positive presence in the community
  4. Social Impact Indicators:
    • Number of jobs created: 200 new local jobs in the past year
    • Water access: 5 new water points installed, serving 2,500 people
    • Education: 50 scholarships provided to employees' children
  5. Theory of Change: FreshDrink Co. develops a theory of change for its women's empowerment program:Inputs (training, microloans) → Activities (workshops, mentoring) → Outputs (100 women trained) → Outcomes (60 women start businesses) → Impact (average 40% increase in household income)
  6. SDG Alignment: The company aligns its clean water project with SDG 6 (Clean Water and Sanitation):
    • Contributes to target 6.1: "achieve universal and equitable access to safe and affordable drinking water for all"
    • Uses indicator 6.1.1: "Proportion of population using safely managed drinking water services"
  7. Human Rights Impact Assessment: FreshDrink Co. conducts an assessment in its supply chain:
    • Identifies risk of child labor in certain ingredient sourcing regions
    • Implements supplier code of conduct and monitoring system
    • Result: Zero reported cases of child labor in the past year

By using these methods, FreshDrink Co. can quantify and communicate its social impact across various dimensions, from job creation and community development to human rights and SDG contributions. This comprehensive approach allows the company to understand its full social impact, identify areas for improvement, and report effectively to stakeholders.

Cambridge Institute for Sustainability Leadership (CISL)

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