Social Footprint: Measuring Corporate Sustainability Performance

There is no dearth of metrics to measure corporate social and environmental performance. What is lacking, however, is a means to assess the actual social and environmental impacts of corporate action-in other words, the degree to which corporate social responsibility (CSR) initiatives actually advance

The Social Footprint is the first non-financial reporting method capable of mathematically calculating the true bottom-line impact of an organization on society. The Social Footprint makes it possible to compare top-line impacts with actual human conditions in society, and thereby compute the social bottom-line of an organization. The concept was developed in collaboration with the University of Groningen in the Netherlands: it hinges on comparisons, expressed quantitatively in fractions, or quotients. For example, if a certain geographical region produces 10 million gallons of freshwater yearly (denominator) and humans in the region use 15 million gallons per year (numerator), then the quotient is 15/10, or 1.5. Ecological sustainability requires the wise conservation of scarce resources for future use, so this example clearly exposes a gap between available resources and their use, illustrating how a quotient over 1.0 is unsustainable. The equation turns on its head when assessing social sustainability. Anything less than 1.0 is considered to be unsustainable.

Interestingly, human input factors integrally into the Social Footprint's calculations. To minimize abstraction and maximize human relevance, the Social Footprint's yardstick is "people feet" (PF), which compare the number of people involved to the social and environmental impacts they create. An overriding goal of the Social Footprint is to personalize sustainability reports-that is, to render results that are not just expressed at organizational or collective levels of analysis, but which are also expressed in terms of per capita shares, stakes, or contributions to related outcomes.

CSI applies the same comparative method to the Social Footprint vis--vis other protocols for measuring corporate social and environmental performance such as the Global Reporting Initiative (GRI). The fact that GRI does not take a quotient approach makes it possible for reporters to show year-over-year improvements in social and environmental performance, while their actual bottom-line performance when compared to standards of sustainability may be worsening.

Other strengths of the Social Footprint include its flexibility, as it can be tailored to show performance against various standards for social and environmental performance, such as the U.N. Global Compact. It can also be computed at any geographic scale of analysis-locally, regionally, nationally, or internationally. The Social Footprint uses metrics that can readily be integrated into financial reports, enhancing the relevance of the method.

Sources GreenBiz.com