Ahead of the Shared Value Measurement Masterclass on Tuesday 13 July, which will explore the B4SI Framework, we asked the CEO of Australia’s Shared Value Project Sarah Downie to reflect on the importance of measuring social impact.
Why is measurement critical to advancing social impact practices such as shared value?
As the saying goes, ‘you are what you measure’. In a shared value context, measurement can therefore help to bring authenticity, intentionality and long-term commitment to social impact in a way that the wider business can understand, and be accountable for.
In saying this, companies should not be deterred from pursuing shared value because they don’t have a firm measurement framework in place at the outset, as this can be developed and improved as the project or initiative is delivered. Having a theory of change is what is most important from the outset, knowing what success looks like and what you think (your hypothesis) will be the steps to achieve it.
B4SI’s new business innovation route to impact is a great place to start and a welcome addition from the shared value community.
How did measurement feature in the conversations during this year’s Shared Value Summit
Measurement has long been a hot-bed discussion in the purpose-led business community – as we continue to build the business case for creating social impact. Our Summit conversation The economics of impact: Is ESG the answer? honed in on measurement by confronting the stirring debate around whether ESG is the pathway to ensuring business accountability to environmental and social problems, or whether it’s just a great distraction. Provocative, I know!
In the end, examining this through a diverse investment lens, the panel’s consensus was that ESG works best when it’s taken out of a purely risk-mitigation space, and considered alongside how social impact can create material value for the business. Ultimately, whilst ESG is a great start, the vibrancy and long-term viability of a company’s commitment to impact is strengthened by connecting it to corporate strategy and performance. This is what shared value is all about. You can find more on this here.
What was your key takeaway from the 2021 Shared Value Summit?
In the words of shared value co-creator, Mark Kramer: “Companies are making small changes around the edges, but not systematically changing. We are now seeing the dire consequences of companies not taking the action we need to see… there is no time to waste.” In short, whilst it is encouraging to see how companies’ appetite for social impact has grown over the past 10 years since shared value was first introduced, we still have a way to go in walking our talk; and moving from good intentions to tangible action. From isolated wins, to transformative systemic change. By now, the vast majority absolutely has the will – we just need to focus on getting aligned and coordinated on ‘the way’. At the Shared Value Project, we’re committed to arming our cross-sectoral community with the tools and inspiration to accelerate this.
How are leading shared value companies measuring their impact and how is it evolving as shared value matures as a concept?
It can be difficult to establish a standardised impact measurement framework, relative to all social challenges and material business benefits. Progress is being made however, and this can be seen in a report recently published by the Shared Value Initiative: Hybrid Metrics: Connecting Shared Value to Shareholder Value. This report addresses the current dilemma that investors are able to identify “good” companies and “profitable” companies, but not companies doing the most good, most profitably. The research makes the connection between companies which are adopting good business practices in a way that benefits corporate performance more explicit. For many, this has long felt like the missing link to cementing purpose-led business as business-as-usual. Of course, some companies are front-footing this challenge, and creating individual, tailored frameworks at a company or project level. We are also delighted to see B4SI companies focusing on measuring their social impact through the new business innovation route to impact and hoping to see these companies embrace more shared value opportunities.
You can read more about the Shared Value Summit in this ProBono News article.