Impact reporting sits at the top of priorities for ESG/CSR leaders, with 96% of top global companies investing efforts to report on environmental and social impact. While big strides have been made when it comes to tracking environmental impact, the “social” part of impact reporting is a little less defined.
Great social impact reports capture the positive effect a business has on society. One important aspect of measuring a business’s social impact is the ability to tie specific initiatives to immediate outcomes. (i.e. ABC Company funded the development of a community garden that provided ##kgs of food to ## families this year.)
But this can be easier said than done—which makes some businesses wonder if they should even bother.
Whether you’re creating your first impact report or trying to figure out how to make your next one better, this article goes over some important ins and outs of social impact reporting. Read on to learn:
- The benefits of social impact reporting
- Challenges with social impact reporting
- What makes a good social impact report
- 3 parts of effective social impact reporting
- ActionFunder’s approach to impact reporting
Benefits of social impact reporting
Communicating and proving social impact is key to ESG/CSR strategies. Fellow ESG/CSR leaders rely on impact reporting to address many of the core challenges facing them today. There are multiple benefits to documenting your wins.
Get stakeholder buy-in.
It can be difficult to get the whole company on board with ESG/CSR initiatives. When you can prove your impact with empirical data and bring it to life with stories, support comes much more readily—often in the form of additional budget and resources.
Identify opportunities to increase your impact.
Nothing reveals opportunities like data. By analysing the outcomes of your efforts, you can clearly see what’s worked and what hasn’t, as well as the ROI of your work. These insights let you identify opportunities to improve and give direction on business decisions.
Demonstrate that your business is walking its talk.
In an era of purpose-washing backlash, proving how your company is living up to its commitments can go a long way towards preserving consumer trust and and mitigating risk.
Support other teams across the business.
Even though social impact reporting typically falls under the umbrella of ESG/CSR teams, it supports nearly every team’s priorities—from marketing and procurement to HR and executive leadership.
- Marketing teams use the data and stories from social impact reports to reach new audiences, engage customers, and drive brand loyalty.
- Sales and procurement teams rely on these reports to demonstrate social value so they can win bids and tenders.
- HR teams tap into proof of social impact to attract new talent, increase employee engagement, and improve employee retention.
- Executive teams leverage social impact data to attract investors, make informed decisions, foster accountability, and mitigate risk.
Challenges with social impact reporting
Even though social impact reporting is obviously worth the effort, it can be hard to do well.
ESG/CSR leaders face several challenges when it comes to measuring their social impact.
- There’s no standardised approach or framework. This leaves a lot of people feeling like they’re starting from scratch.
- There also aren’t any defined standards of performance, so setting benchmarks can be a wild guess.
- Most social impact data isn’t readily available. Capturing it can be time-consuming and create a large administrative burden. Multiple people often need to be involved, which creates months-long reporting delays.
- It’s challenging to ensure data is accurate and unbiased, particularly because the nature and definition of social impact are subjective.
But don’t let these challenges stop you. You don’t have to create the perfect report. You just need to do your best to tell a story about how your business is making a difference for people in your community.
What makes a good social impact report
A good social impact report should summarise your business’s social and community investments, incorporate stories that illustrate the resulting benefits, and back up all up with quantifiable outcomes.
Summarise your investments
Summarise the investments your business has made in each of the social and community initiatives it’s focused on. Some areas you can highlight are:
- Corporate giving programs: This could include your social investments, charity funds, and employee volunteer programs.
- Diversity and inclusion efforts: Here’s where you talk about representation of historically marginalised groups, board and leadership composition, wage equality across all identities, and supporting minority-led businesses in your supply chain.
- Employee well-being: This section includes things like health care coverage and wellness initiatives, as well as learning and professional development programs.
Include both outputs and outcomes
Each initiative you talk about needs at least 2-3 supportive data points that directly correlate to that effort. For corporate giving programs, you might include quantifiable outputs like:
- Total £££ the company gave
- Total number of beneficiaries
- Total number of hours volunteered
- Categories of beneficiaries supported
- Where support was focused geographically
But don’t stop at listing your outputs. What’s really interesting to the people your audience is the change that’s been created through your outputs – i.e. the project outcomes.
To describe the outcomes you’ve achieved you’ll need to capture both quantitative and qualitative data about what impact your outputs have.
Incorporate stories that show benefits
Data can only capture half the picture. Use stories, images, and quotes to bring to life the real human impact of your contributions.
If employee wellbeing is an area you’re focused on, this could be a video from a company wellness event paired with a few quotes from participants. If community investment is your priority, then include photos from the projects you’ve supported.
Designing your content is a key part of telling the story. Make it engaging. Champion the people you’ve supported and the change you’ve helped create.
“Stories are really important as [they] keep us engaged and remind us what we’re doing this for. So really think about the story you want to tell and, importantly, who you want to tell it to. Consider the audience – whether it’s an investor, customer, or organisation you’re partnering with – that then helps you to direct the story.”
~ Léyoh Goodall, Social Value Portal
Catch Léyoh’s full interview in this episode of the Breaking the Mould podcast—From Data to Impact: Leveraging Tech and Storytelling for Social Good.
3 parts of effective social impact reporting
Effective social impact reporting starts long before it’s time to gather numbers and doesn’t end when the report is finished. It’s a three-part process that includes:
- setting clear objectives
- building your reporting framework
- telling your story in an engaging way
1. Social impact starts with clear objectives
You should be thinking about measuring outcomes from the moment you start planning a social impact programme. Every programme should have a clear aim and supporting KPIs.
What do you hope to achieve?
Are you trying to solve a specific problem?
Support a specific number of people?
We recommend involving the community here. Otherwise, there can sometimes be a mismatch between well-meaning but mistargeted CSR strategies and where the real need is on the ground.
Ask potential beneficiaries what their challenges are, what positive change would look like, and how improvements might be tracked. Or use a needs analysis and impact forecasting tool.
Involving community stakeholders in the planning process will:
- increase engagement in the programme
- improve impact tracking
- and ultimately lead to increased social impact
2. Choose (or build) a framework
As we mentioned, there is no standard approach to measuring social impact. But there are lots of frameworks you can use or adapt. Take some time to understand some of the existing approaches to measuring social impact.
These four impact reporting frameworks are the most common:
- The National TOMs (Themes, Outcomes, Measures): the most widely accepted standard for UK businesses to measure social value.
- Sustainable Development Goals (SDG) Framework: a global framework with 231 indicators to measure social value in the context of the 17 Sustainable Development Goals.
- Business for Societal Impact (B4SI): a three-pillar approach for businesses to measure social activities according to inputs, outputs, and impact.
- B Impact Assessment (BIA): a framework businesses can apply to evaluate how their operations impact employees, communities, environments, and customers
Many people use one of these frameworks as a starting point. Then they layer on additional data points that align with key business objectives and capture target community outcomes.
Your final social impact report should present a combination of input, output, and outcome indicators, include key qualitative and quantitative data points, plus mix in some multimedia content and testimonials.
3. Communicate your impact
After you’ve invested the effort to prepare your social impact report, it’s time to share it with the world. It will do little good tucked away in a folder on the company drive.
Plan to share highlights from the report with internal and external stakeholders—employees, customers, investors, and community members.
We recommend choosing various formats and mediums to tell the impact story most effectively. You can share the whole report, create a short report summary, turn your strongest data points into a mini-infographic, or compile key quotes from the report into a lookbook.
Remember that different audiences prefer to consume different types of content. Give your stakeholders the kind of content they most enjoy.
This checklist contains 22 ideas on how to communicate your social impact.
ActionFunder’s approach to impact reporting
Our approach to reporting on community impact is developed off the back of 15 years working with grassroots non-profits tackling social and environmental challenges.
By working with clients across teams and in many sectors, we understand the range of different reporting requirements.
Whether you want to engage stakeholders or prove the social value of our work, we aim to ensure our solution is flexible enough to meet your needs.
We collect the key data, prioritise and display this to you in an engaging way while also giving you access to the raw data.
Our bespoke impact framework:
- Aligns with the SDGs.
- Delivers quantitative outputs and outcomes.
- Delivers qualitative data, quotes and multimedia assets
- Includes real-time social updates that capture community impact.
- Provides both project-level reporting and organisation-wide reporting
- Allows for customisable reports
- Provides downloadable charts and graphics
- Is available at the touch of a button via a user-friendly dashboard.
You can take social impact data from our community engagement platform and plug it into tools like the Social Value Portal so you can better calculate total social impact and value.
ActionFunder also makes it possible to forecast social value at a hyper-local level. Use it to plan and create community impact in the backyards of your stakeholders, then highlight that impact in your annual reports.
To take a tour of our impact reporting tools, book a demo here.
