Learning more about Social Return on Investment will give you a better understanding of how to measure your impact and be accountable to your stakeholders. To start off this guide and understand the concept of Social Return on Investment, it is important to give a brief explanation of what is meant by ‘impact measurement’ and what we mean when we talk about ‘value’.
What is impact measurement?
Impact measurement has broad applications and while there is a focus on investors and government requirements, service providers have also called for their needs and those of their beneficiaries to be reflected in measurement We feel, therefore, that the social and environmental performance needs to be measured with the same level of robustness as financial performance – which is very common in all different kinds of businesses. Measuring financial performance can offer important insight, but did you know there are also many benefits of measuring your impact?
There are three main benefits of good impact measurement:
1. The ability to generate value for all stakeholders. This impact goes beyond a simplistic focus on the needs of a potential investor and instead drives at ensuring value creation for investors, investees and beneficiaries.
2. The potential mobilization of greater capital into areas of positive social impact creation.
3. Increased transparency and accountability for delivering on the intended area of impact. Reading this brief explanation only, you can understand that every day our actions and activities create and destroy value – they all change the world around us.