1 Monitoring Social Impact: How does business measure up?

BUSINESS INTELLIGENCE FOR CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Monitoring Social Impact:How does business measure up?Monitoring Social Impact:How does business measure up?

2 Monitoring Social Impact: How does business measure up?

Executive summary

Measuring financial data and environmental impacts have become part and parcel of the CSR and Annual Report cycle, and businesses of all stripes have become well versed in measuring and benchmarking all manner of sustainability metrics, from carbon intensity and water use to human rights issues and local economic development. However, while it is now relatively straightforward for organisations to record social outputs, understanding what this really means – social impact – is more complex, as is the question of how one can accurately and reliably quantify, measure, and report on these social impacts.

This report asks why this is the case, and explores what some leading businesses are doing about it. Through a series of carefully constructed case studies developed by original and detailed conversations with the businesses involved, the report presents a series of different methodologies that the corporate and non-governmental sectors have developed, and are using, to capture and report the social impact of their activities. This includes both the (potentially negative) direct and indirect consequences of their operations, and their contribution to society; for example any ‘positive’ impacts from CSR programmes and phil-anthropic ventures. Each case study describes how the organisation in question has worked alongside stakeholders – in most cases involving an NGO or other non-corporate entity – to develop a method-ology for social impact measurement.

The report reveals that while a number of different strategies are being tried and tested at varying levels, companies are still struggling to find a solution to social impact measurement that is both meaningful

and pragmatic. In light of these conclusions, this report also explores some of the reasons for this ongoing struggle, although the case studies included here do provide some clues as to how businesses can have the greatest chance of success in devel-oping a way to meaningfully measure their social impacts.

Some of the fundamental lessons to take away from this report can be summed up thus: Transparency and being open to sharing experiences, challenges, successes and failures with peers and partners is key to developing a more holistic and effective way of measuring social impact; Starting out small, if needs be, is still a perfectly acceptable approach and is more constructive than being overly ambitious and going too far too fast; and Collaboration with partners – as every single business profiled in this report has done – will greatly enhance your chances of succeeding.

Our research demonstrates that the process of social impact measurement is continually evolving, and it would appear at this stage that any universally- accepted methodology is still some way off. And with the UN Sustainable Development Goals (SDGs) now on the horizon, organisations will increasingly be required to think more holistically about the value they create. Finding robust yet practical methods with which to do this will require collaborative thinking, investment, and persistence, but in doing so will present an opportunity for businesses to demonstrate that real social value is not just about reporting – it can become a source of competitive advantage and trust.

33 Monitoring Social Impact: How does business measure up?

6.1 Streamlining environmental and social goals

Aviva, the UK’s largest insurer and one of Europe’s leading providers of life and general insurance partnered with climate and development experts ClimateCare, to develop a new way to measure and report the full impact of offsetting Aviva’s carbon emissions through ClimateCare’s climate and devel-opment projects.

In 2006 Aviva became the first global insurance group to offset its entire operational emissions and it remains carbon neutral. In recent years, Aviva has worked closely with ClimateCare to ensure its ‘green’ status has positive social impacts too, and now it offsets its carbon emissions through an integrated Climate+Care programme designed to both protect the environment and improve people’s lives.

Figure 8 Aviva’s climate and development investments

* Based on the LBG measurement 2011-2014

Source: ClimateCare

6Aviva and ClimateCare: Measuring the social value of carbon offsets

The method: The London Benchmarking Group (LBG) Framework

It is challenging and time consuming to measure and report the total number of people benefiting from any project and it is more challenging still to understand what those benefits mean for people’s lives. An added complication arises when trying to attribute impacts to the purchase of a specific volume of carbon reduction credits.

34 Monitoring Social Impact: How does business measure up?

Aviva and ClimateCare: Measuring the social value of carbon offsets

Their programme includes support for two world leading projects:

1. LifeStraw Carbon for Water, Kenya: This ground-breaking project provides simple gravity-fed water filters to over 4 million people. This cuts carbon by reducing the need to boil water on open fires to make it safe to drink and improves lives by reducing people’s exposure to waterborne diseases like typhoid and cholera.

2. Envirofit Efficient Stoves, India: The stoves significantly impact both health and the environment, reducing toxic emissions by up to 80%, carbon dioxide emissions by up to 60%, and black carbon emissions by up to 40%. The stoves also generate savings for the consumer by reducing fuel consumption by up to 60%, and they improve cooking efficiency by up to 40%.

At a project level there is robust evidence of both the carbon reductions delivered and how these initiatives improve people’s lives. However, Aviva and ClimateCare wanted to understand exactly what proportion of these impacts Aviva could claim, relative to their contribution.

For carbon reductions the measurement was easy – Aviva had purchased a known volume of measured and verified carbon reductions. Measuring social impacts, though, was more difficult.

However, because of the way the programme was designed, they were able to apply the LBG Framework to robustly measure and report on the

additional benefits this had on local communities. Already an LBG member, applying this Framework to measure and report the social impacts of its carbon offset programme made sense for Aviva and allowed comparison with its wider community investments.

This was the first time the LBG framework has ever been applied to a carbon offset programme and now provides a model for other organisations that offset through Climate+Care programmes to follow.

What makes it possible to gather this social impact data is the type of carbon reduction projects that ClimateCare specialise in - those that deliver community benefits at a household level, for example providing safe water filters or clean cookstove technology to families. In order to measure carbon reductions through these projects, households are already visited on a regular occurrence to measure uptake and use of the new technology, so what could potentially be prohibitively expensive social impact monitoring can in fact piggy back on the gathering of this carbon data.

The LBG methodology not only measures outputs, but outcomes. ClimateCare was able to use it to demonstrate how their projects not only provided technology, but have provided information about usage and impact. This showed that in just two years, Aviva’s carbon offset programme with ClimateCare had improved the lives of 200,000 people in Kenya and India. And to date, Aviva is now able to report that it has offset over 1 million tonnes of CO₂ and improved life for 800,000 people.

“Using this methodology we can demonstrate the full value of offsetting our carbon emissions. It’s what our customers and investors expect so it’s really important we can credibly show this.” – Zelda Bentham, Head of Sustainability, Aviva

35 Monitoring Social Impact: How does business measure up?

Aviva and ClimateCare: Measuring the social value of carbon offsets

This data allows Aviva to demonstrate the impact of its support on people’s lives as well as the envi-ronment, engaging internal colleagues and external stakeholders. By using the LBG framework for their wider community investment programmes, Aviva was also able to compare the impacts of its carbon reduction investments with community investments. In addition, Aviva now has a benchmark from which they can set targets for future developments.

6.2 Looking ahead

Aviva has committed to a long term partnership with ClimateCare, allowing the two organisations to work closely together in delivering an integrated Climate+Care programme that reduces enough carbon to maintain Aviva’s carbon-neutral status, all while improving lives around the world. With the advent of the new Sustainable Development Goals, the two partners are also working to demonstrate how Aviva’s programme delivers against multiple SDG issues and are encouraging others in the insurance sector and beyond to adopt similar programmes as a cost-effective means to deliver environmental and social impact.

Top tips

• Set clear targets from the outset of your programme. These should cover social as well as environmental benefits you intend to deliver by offsetting your carbon footprint.

• Work with a specialist organisation to deliver both social and environmental outcomes through the projects.

• Talk to other businesses: There is no perfect way to measure these impacts – understand the strengths and weaknesses of each approach to help you decide what’s right for your business.

“Applying the LBG framework to their ClimateCare programme has helped Aviva demonstrate the success of our work together and make the business case for further investment. Our other clients are already benefitting from this work and rolling out the framework across their programmes.” – Robert Stevens, Head of Corporate Partnerships, ClimateCare

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