Organizations should be able to create economic value for their shareholders, but also environmental and social value for all their stakeholders. This is what professors Porter and Kramer stated in 2011 in their theory of the creation of shared value. Techniques to measure this value are needed if we are to account for it. Although it was an unknown field for the general public, there were already pioneering applications for measuring social impact some years ago. For example, in 1966, NASA was already using indicators to measure the social impact of its programmes. They continue to use this type of indicator nowadays.
A lot of water has passed under the bridge since then and the measurement of social impact has evolved considerably.
The first thing that happened in recent years is that the measurement of social impact changed from being an activity developed by social enterprises and non-profit entities to measure the achievement of their mission, to being applied in all types of companies and organizations, and in all types of sectors (finance, education, real estate, etc.).
A second change is that we have gone from having a few methods and tools for measuring social impact focused on the area of social economy and the third sector, to multiple conceptual frameworks, methods, and tools. According to a recent study carried out by ESIMPACT, more than ten different methods are used in Spain alone. Other sources speak of more than 100 different impact measurement methods. This diversity causes confusion in organizations that need to prepare information and in the users of that information. In addition, there is an increase in the cost of preparing the information.
In Spain alone, more than ten different methods of measuring social impact are used, which causes confusion in organizations and users
A third change is the array of objectives for measuring impact. Some organizations measure social impact to ensure they are fulfilling their mission, while others aim to inform their stakeholders. Some organizations simply measure social impact to comply with regulations.
Currently, a paradigm shift is taking place concerning the creation of value in organizations. This paradigm shift is supported by at least three key factors:
Another important and necessary factor to consolidate this new paradigm is the measurement of social and environmental value.
The SDGs are a guide so that states and organizations can define their objectives for the creation of social and environmental value based on the 17 SDGs or the most relevant challenges for the planet.
The evolution of social impact measurement seems unstoppable due to the information needs of organizations and their stakeholders. This raises some important challenges when attempting to improve the measurement: