How Can I Measure My Company's Social and Environmental Impact?

A full 85% of today's executives have increased their sustainable investments over the past year, according to Deloitte's latest sustainability report. However, one thorn remains: being able to assess the impact of the actions they put in place, a challenge that nearly a quarter of the executives surveyed concluded.

Measuring social and environmental impact is an essential step for companies looking to implement a CSR (corporate social responsibility) or ESG (environmental, social, and governance) strategy. It allows your company to better understand the positive and negative effects of its CSR efforts, as well as to demonstrate their ROI (return on investment) to your clientele and other players. It also gives meaning to your team's work and helps you move along toward the ultimate goal: achieving sustainable performance. 

In this article, we invite you to discover the best practices, tools, and KPIs (key performance indicators) that will help you measure your company's social and environmental impact effectively.

What's Impact? 

Before you start to measure your social and environmental impact, it's important to understand what we mean by "impact."

Definition

Impact represents all changes—both positive and negative—a company's activities generated over the long haul.

Social vs. Environmental Impact

There are several types of impact, and here we're talking about the social and environmental types. 

‍Social impact measures the consequences of a company's activities on individuals and society. You can assess it with indicators like: 

• workplace well-being
• diversity and inclusion 
• community involvement
• skills development

Environmental impact assesses the company's impact on the planet. This includes:

• CO² emissions 
• energy consumption
• waste management
• use of natural resources 

Impact vs. Results

Careful there—don't confuse impact with results!

Results are the immediate effects of an action, while impact is what persists over time. For example, an internal training project might result in employees acquiring new skills. However, the real impact would be an improvement in their well-being, commitment, and performance over the long term.

How Can I Assess My Social and Environmental Impact?

To effectively measure your company's social and environmental impact, you need to structure your approach. Here are four key steps.

Frame Impact Measurement

Before embarking on an impact assessment project, you need to ask yourself 5 key questions, according to the Impact Management Project: 

1. What: What are the objectives of your impact initiatives? Are they well aligned with your purpose and CSR strategy?

When defining your objectives, ask yourself whether they are SMART (specific, measurable, achievable, relevant, and time-bound). You can also use the OKR (objectives and key results) method to help you define them. This will enable you to set ambitious goals at the company level, then match them up with team objectives. For example, on the environmental front, one of your OKRs might read as follows:

• objective: reduce the company's carbon footprint
• key results: 
  
  • cut CO² emissions by 20% by January 2026 
  • 100% renewable energy supply for premises by the end of the year

2. Who: which stakeholders does your approach affect? (think employees, customers, local communities, and more)

3. How great is the impact you need to assess? How many people will be affected, in what ways, and for how long?

4. What contribution does it make? To what extent do your actions contribute to achieving the desired impact? How would the situation have panned out differently if you had done nothing?

5. What's the risk? What's the probability that the impacts created will not be the one expected? What would be the consequences for the stakeholders concerned?

Map Your Impacts

Once the objectives of the impact assessment have been defined, the next step is to map out the social and environmental impacts the company wishes to generate. 

Methodology

Identify for each impact: 

• its nature and scope
• stakeholders involved (directly or indirectly)
• the changes we're looking for
• priority level for the company
• the KPIs to use measure the success of the changes 

To avoid going down the wrong road, we advise you to directly question the stakeholders concerned, for example by conducting informal interviews. Their feedback will enable you to better assess the impact of your actions—and then adjust your initiatives accordingly.

Case in Point

If we take the carbon footprint reduction objective mentioned above, here's how we could map the associated impact: 

• Type of impact: 
  
  • direct: reducing the company's carbon footprint
  • indirect: improving the company's image with customers and investors who are sensitive to environmental issues
• Scope: national, with effects on all the company's production units
• Stakeholders:
  
  • directly affected: operations and purchasing departments, renewable energy suppliers, technical teams, management
  • indirectly impacted: employees, investors, eco-responsible customers, local communities
• Changes sought:
  
  • employees: increased motivation to work for a committed company, which could contribute to better engagement at work
  • customers and investors: the company is seen as a responsible player, which could strengthen customer loyalty and make it more attractive to investors.
• Priority: high
• KPIs: tons of CO² released; percentage of renewable energy used

Collect Data—Lots of It

So, your CSR actions are in progress. How do you know if they're leading to the desired results? That's the whole purpose of data collection! This step exists for three main purposes:

• Measure the extent of your environmental and social impact. In other words, quantify the actions carried out and the beneficiaries reached.
• Evaluate the effectiveness of the impact—the tangible effects of these actions.
• Calculate the social return on investment (SROI)—the added value from the impacts your actions generated. You can accomplish this by comparing the positive and negative social and environmental impacts your actions generated. 

To measure these different elements, we'll need—as with impact mapping—to interview the people concerned, but this time, in more formal fashion. Ahead of these interviews, take the time to clarify: 

• Who you're going to interview (all the stakeholders concerned, or just a sample)
• What questions you'll ask them (stay on the neutral side to avoid biased answers)
• Who'll collect the data (internal or external, and what roles?)
• How you'll collect the data (via an online questionnaire or telephone interview, for example)
• How the data will be analyzed and compared

Analyze and Present Your Findings and Results

Analyzing the data from these interviews will enable you to understand the real impact of your actions, and what's more, to confirm whether the obtained results are indeed those you anticipated. This analysis is then a chance to assess your successes as well as any areas in which you need to improve.

Beyond the analysis, the important thing is to promote the company's social and environmental impact to your stakeholders. Here are several possible formats for reporting results (to be tailored for each audience):

• The impact report: this summarizes the results of your analysis and identifies any deviations from the expected impacts. It's a document for both internal and external use, and as such, can be integrated into your CSR report. 
• Dashboards: often used internally, dashboards enable continuous monitoring and easy visualization of impact indicators.
• Visual aids (presentations, infographics, videos, and more): these enable all your stakeholders to better understand and visualize the impact of your actions. They can be used for meetings or asynchronous information sharing.

The key is to communicate regularly, clearly, and concisely. Finally, don't hesitate to rely on ambassadors to pass on your messages in the field!

What Tools Should I Use?

‍50% of executives surveyed by Deloitte have already implemented digital solutions to achieve their sustainability objectives. So, why shouldn't you?

‍Several tools can help you measure your company's social and environmental impact, as well as document and communicate the CSR impact of your actions. Here are the main ones to keep in mind: 

• Impact Track: This tool helps companies measure and visualize their social and environmental impact. It facilitates data collection and analysis, enabling continuous progress monitoring.
• Zei: Zei supports companies in their sustainability initiatives with an ESG platform that enables them to assess their environmental and social impact and define targeted action plans. 
• Apiday: Specializing in ESG reporting, Apiday centralizes data, tracks progress on social and environmental criteria, and generates comprehensive impact reports.
• Talkspirit: Lastly, here's a tool that enables you to communicate internally on your social and environmental impact—both synchronously (chat, videoconference) and asynchronously (news feed, home page). You can even use Talkspirit to define your CSR and ESG objectives, map all the roles of your stakeholders, and track progress of their projects. In short, Talkspirit is the ideal tool for impact-driven companies seeking to increase transparency and empower their employees.

Consulting firms such as PwC, Kinomé, Improve, and Bartle can also help you conduct a social and environmental impact assessment, so don't hesitate to call on their expertise!

A final word

Assessing your company's social and environmental impact is essential to enhancing the value of your CSR actions, demonstrating their ROI, and continuously improving your practices. To this end, make sure you equip your teams with the right tools, surround yourself with experts (especially when expertise is lacking in-house), and follow the steps we outlined above. Finally, don't forget to communicate your actions both internally and externally. This is not only a way of enhancing the value of the work you've done but also of strengthening your stakeholders' trust and commitment.

Want to find out more about how to streamline collaboration and communication on your CSR projects? Download our white paper to discover the tools used by next-generation companies: 👇

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