Measuring IMPACT Framework Methodology: Understanding the business contribution to society

measuring
IMPACT
Framework Methodology
Understanding the business contribution to society

Acknowledgements
The Measuring Impact Framework was developed by business for business. We are also extremely
grateful for the active engagement and support of the measuring impact working group who contributed to
the creation of the methodology and endured many hours of discussion and editing to produce the final
Framework. In particular, we would like to thank those companies in the working group who were brave
enough to pilot the Framework when it was in its infancy. We would like to express our sincere
appreciation to Environmental Resource Management (ERM) who led this work on behalf of the WBCSD
membership and Peter Rowley and Kate Sullam in particular, for their leadership and invaluable expertise
in the field of impact assessments.
Measuring Impact Working Group
The Framework has also benefited greatly from a highly engaged set of external stakeholders from
academia, development agencies, non-governmental organizations and multilateral organizations who
have provided honest and constructive feedback over the course of the Framework’s development. They
have challenged and supported the WBCSD to build a Framework that encourages business to engage
more thoughtfully in this thing called development.
External stakeholders
• Alex Arnall (Independent consultant)
• Jason Bauer and Rebecca Tunstall (Millennium Challenge Corporation)
• W. Robert de Jongh (SNV - Netherlands Development Organization)
• Sean Gilbert (Global Reporting Initiative)
• Beth Jenkins (CSR Initiative, Harvard University)
• Liane Lohde (Development Effectiveness Unit, International Finance Corporation)
• Sujata Lamba and Weijen Leow (SME Linkages Unit, International Finance Corporation)
• Anthony Miller (Corporate Transparency Unit, UN Conference on Trade and Development)
• John Morrison (Business Leaders Initiative on Human Rights)
• Mokhethi Moshoeshoe (African Institute of Corporate Citizenship)
• Michael Oxman (Business for Social Responsibility)
• Dr. Norman Reynolds (The People’s Agenda, South Africa)
• Johan Verburg (OxfamNovib)
• Helene von Granitz (Swedish National Institute of Public Health)
• Sheri Willoughby (World Resources Institute)
• Jo Zaremba (Oxfam GB)

Table of Contents
Summary .................................................................................................... 7
Introduction ............................................................................................. 10
Primary users ………………………………………………………………………………………...10
Framework approach ............................................................................................................. 11
The business activities........................................................................................................... 12
Step 1 Set boundaries .......................................................................... 18
1.1 Identify the objective(s) for the assessment ................................................... 18
1.2 Define the geographic area of the assessment .............................................. 19
1.3 Collect development context information for the assessment area ................. 19
1.4 Select the business activities to be assessed ................................................ 20
Step 2 Measure direct and indirect impacts........................................ 23
2.1 Identify the sources of impact for each business activity ................................ 23
2.2 Identify relevant indicators for direct and indirect impacts .............................. 23
2.3 Measure......................................................................................................... 25
Step 3 Assess business contribution to development ...................... 26
3.1 Determine the level of stakeholder engagement ............................................ 26
3.2 Engage with stakeholders to prioritize the development issues (optional) ...... 27
3.3 Build hypothesis of the business contribution to development ........................ 28
3.4 Test hypothesis with stakeholders and refine overall assessment.................. 32
Step 4 Prioritize management response ............................................ 34
4.1 Identify priority areas for action ...................................................................... 34
4.2 Consider possible responses and prepare recommendation to management 35
4.3 Decide on way forward .................................................................................. 39
4.4 Develop new indicators to monitor progress .................................................. 39
Appendices .............................................................................................. 40
Appendix 1: Glossary ........................................................................................................ 40
Appendix 2: Additional sources of information for Step 2 ................................................... 43
Appendix 3: Scorecards for Governance Sustainability .................................................. 55
Appendix 4: Additional development context for Step 3 ..................................................... 57
Appendix 5: Millennium Development Goals ..................................................................... 65
Appendix 6: UN Global Compact principles and relevant international declarations and
conventions ................................................................................................... 67
Notes and references .............................................................................. 68

Figures
Figure 1 – Measuring Impact integration with ESHIAs ............................................................... 10
Figure 2 – Four-step methodology ............................................................................................ 11
Figure 3 – Example importance versus impact graph for the business activities ....................... 22
Figure 4 – Example impacts and linkages arising from the “infrastructure” business activity ..... 24
Figure 5 – Assessment process for different levels of stakeholder engagement ........................ 27
Figure 6 – Example linkages between the sources of impact arising from “Infrastructure” and the
development priorities ............................................................................................................... 29
Figure 7 – Key impacts contributing to the “access to quality healthcare” development priority . 35

Tables
Table 1 – Example of output from Step 1 .................................................................................. 21
Table 2 – Example measurements and indicators for the “Infrastructure” business activity ....... 25
Table 3 – Example hypothesis of business contribution - “Infrastructure” to the “SME
development” development priority ........................................................................................... 30
Table 4 – Example hypothesis of business contribution - “Infrastructure” to the “access to
healthcare” development priority ............................................................................................... 31
Table 5 – Summary hypothesis of business contribution arising from the “Infrastructure”
business activity ........................................................................................................................ 32
Table 6 – Example change to hypothesis after stakholder engagement .................................... 33
Table 7 – Summary matrix from Step 3 ..................................................................................... 33
Table A-1 – Example sources of impact and indicators for corporate governance .................... 44
Table A-2 – Example sources of impact and indicators for environmental management ........... 46
Table A-3 – Example sources of impact and indicators for Infrastructure .................................. 48
Table A-4 – Example sources of impact and indicators for Products Services ....................... 49
Table A-5 – Example sources of impact and indicators for Jobs ................................................ 51
Table A-6 – Example sources of impact and indicators for Skills Training .............................. 52
Table A-7 – Example sources of impact and indicators for Procurement ................................... 53
Table A-8 – Example sources of impact and indicators for Taxes ............................................. 54

Additional guidance notes
Box 1 – How do you define local? ............................................................................................. 19
Box 2 – Recommended process for selecting business activities .............................................. 20
Box 3 – Recommended process for identifying and mapping indicators .................................... 24
Box 4 – Guidance on stakeholder engagement for identifying development priorities ............... 28
Box 5 – Example of a partnering strategy to support SME Growth: International Finance
Corporation ............................................................................................................................... 36
Box 6 – Example strategies for enhancing the contribution of procurement to enterprise growth
.................................................................................................................................................. 37
Box 7 – Example strategy for improving skills: Eskom in South Africa ....................................... 37
Box 8 – Example strategies for mitigating negative impacts on human rights ............................ 38

Foreword by the World Business Council for Sustainable Development
According to Chinese philosophy “a journey of a thousand miles begins with a single step.”
As members of the World Business Council for Sustainable Development’s (WBCSD) Development Focus
Area steering committee, we believe that globalization can be more inclusive and its benefits shared more
widely. As leaders, we are committed to playing our part in lifting people out of poverty and into the formal
economy by doing what we do best - business. We believe that economic stability brings positive change
that should help to address other challenges, including climate change, pollution, resource depletion, and
demographic shifts. We recognize that all of this is easier said than done and progress can only be
monitored by building long-term measures into our definition of success.
With this in mind the WBCSD embarked on a journey in the spring of 2006 to create a framework to
enable business to measure its impact on society. The ensuing process built upon previous work by the
Council, and has sought broad input from all sectors in the development community, in an endeavor to
create a unique approach enabling companies to do better business – business that is both profitable and
helps to address some of the world’s major challenges such as endemic poverty and ecosystems
degradation. This initiative has drawn heavily upon other pioneering approaches adopted by companies
from different industrial sectors and geographic contexts.
The result is an over-arching framework that is designed to guide companies from any sector through a
process of measuring, assessing and managing their impacts on society wherever they operate.
This Measuring Impact Framework is being released at the halfway point on another journey – the journey
towards the Millennium Development Goals. We know that unless the pace of change accelerates, it is
unlikely that this journey will reach its desired end. In the spirit of “what gets measured gets done”, we
hope that this framework will help business play its part in the successful delivery of these goals.
Paul Hanrahan, Sir Mark Moody Stuart
President and CEO, AES Corporation Chairman, Anglo American
Dr. Robin Bidwell CBE Roberto Salas,
Executive Chairman, ERM Chairman and CEO, GrupoNueva

Foreword by the International Finance Corporation
The International Finance Corporation (IFC), a member of the World Bank Group, provides long-term
financing and advisory services to private sector clients. We work to maximize the development impact of
our clients’ activities and to bring about additional benefits to the local communities where they operate.
One of the ways we do this is through Advisory Services that help client companies develop their local
supply chain for goods and services. This is the thrust behind the IFC Small and Medium Enterprises
Linkages Program, which over the last five years has helped raise revenues for local businesses by about
US$ 1.2 billion through procurement contracts. At the same time, these efforts have helped more than 200
small enterprises with limited access to finance obtain about US$ 25 million in bank financing—funding
that also helps level the playing field for these businesses. IFC’s work, including other community
outreach programs such as the IFC Against AIDS initiative, has enabled investment sponsors to become
better integrated with their operating environments and enhance their social license to operate. Today,
there are over 60 IFC Linkages projects in 35 countries.
Ultimately, IFC’s impact and value to clients depend on our ability to track and learn from results. IFC has
a long-established framework for measuring development results of private sector investments
(www.ifc.org/results). This includes not just assessing financial performance, but also measuring
development impact and the sustainability of engagements. An important feature of results measurement
is the use of standard indicators, which enable IFC to compare project performance and aggregate results
across the portfolio for a consolidated statement of overall impact. We are convinced that learning and
adaptation, based on results measurement, can help ensure better design of projects and greater impact.
IFC is pleased to make our standard indicators available to the World Business Council for Sustainable
Development, for incorporation into the Council’s Measuring Impact Framework. The framework, like the
approach IFC takes in measuring results, emphasizes the importance of data and evidence in making
informed plans and ensuring continuous improvement. We welcome the opportunity to share our
experience in IFC Linkages, including how this affects key areas identified in the Council’s Framework,
such as jobs, local contracting opportunities, skills and training, and enterprise growth.
We hope that the members of the World Business Council for Sustainable Development will find this a
useful tool as they work to bring about better business practices around the world.
Sujata Lamba
Senior Manager and Head of Global Linkages Unit
International Finance Corporation

Summary
In the spring of 2006, the WBCSD embarked on a two-year journey to develop a framework to assess the
contribution of business to the economic and broader development goals in the societies where that
business operates. This grew out of a request by WBCSD member companies to develop a measurement
framework that could underpin the license to operate, improve the quality of stakeholder engagement,
help manage risks more effectively and identify ways to enhance the business contribution to society.
The companies requested a clear and practical measurement methodology that could be adapted to
different business sectors, be used by operations anywhere in the world and be tracked over time. Unlike
environmental impact assessments (EIAs) or environmental, social and health impact assessments
(ESHIAs) that are normally carried out as part of due diligence to determine future potential impacts
arising from a greenfield or brownfield business investment, they wanted to be able to measure actual
impacts at any stage in the life cycle of an operation.
The resulting Measuring Impact Framework is designed to help companies understand their contribution
to development and use this understanding to inform their operational and long-term investment decisions
and have more informed conversations with stakeholders.
The Framework’s output is not designed to be rolled up for corporate reporting purposes. However,
companies may choose to communicate results to external audiences and use the assessment to improve
the quality of their reporting.
Key features of the WBCSD Measuring Impact Framework
• Grounded in what business does – built by business for business
• Moves beyond compliance – attempts to answer questions about what business can contribute
Summary Introduction Step 1 Step 2 Step 3 Step 4 References
Appendices
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beyond traditional reporting
• Encourages stakeholder engagement – supports open dialogue with stakeholders to create a
shared understanding of business impacts and societal needs, and to explore what business can
and cannot do to address these needs
• Flexible - designed for any business and/or industry at any stage in its business cycle, operating
anywhere in the world
• Complements existing tools – makes use of what is already out there (for example, the Global
Reporting Initiative and IFC Performance Standards).
Primary users
The output from the Framework is designed for company decision-makers on a site or product line, and/or
at a country level. The assessment itself should be carried out by a skilled practitioner (internal or
external) with company involvement. While the Framework has been developed for operational managers,
different people within the company, such as procurement and tax advisors, may also use the Framework
to refine company policy and/or strategies.
Approach adopted in the Framework
The Framework is based on a four-step methodology that attempts to merge the business perspectives of
its contribution to development with the societal perspectives of what is important where that business
operates. It is rooted in a business approach and begins with measuring what business does through its
business activities. The business activities are grouped into four clusters:
1. Governance Sustainability (Corporate Governance and Environmental Management)
2. Assets (Infrastructure and Products Services)
3. People (Jobs and Skills Training)
4. Financial Flows (Procurement and Taxes)

STEP 1 –
Set
boundaries
STEP 3 – Assess
contribution to development
STEP 2 - Measure
direct and indirect impacts
Stakeholder
engagement
STEP 4 – Prioritize
management
response
Measuring Impact Framework
Decision by individual companies
Appendices
Page | 8
The four-step methodology:
STEP 1 – SET BOUNDARIES
“Define your business”
Determine the scope and depth of the overall assessment in terms of geographical boundary and types of
business activities to be assessed.
1.1 Identify the objective(s) for the assessment
1.2 Define the geographic area of the assessment
1.3 Collect development context information for the assessment area
1.4 Select the business activities to be assessed
STEP 2 – MEASURE DIRECT AND INDIRECT IMPACTS
“Measure your company footprint”
Identify and measure direct and indirect impacts, mapping out what is within the company’s control and
what it can influence through its business activities.
2.1 Identify the sources of impact for each business activity
2.2 Identify relevant indicators for direct and indirect impacts
2.3 Measure
STEP 3 – ASSESS CONTRIBUTION TO DEVELOPMENT
“Understand your footprint in the development context”
Assess what the company’s direct and indirect impacts contribute to the development issues/priorities in
the assessment area.
3.1 Determine the level of stakeholder engagement
3.2 Engage with stakeholders to prioritize the development issues (optional)
3.3 Build hypothesis of the business contribution to development
3.4 Test hypothesis with stakeholders and refine the overall assessment (optional)

STEP 4 – PRIORITIZE MANAGEMENT RESPONSE
“Make better-informed decisions”
Extract the key risks and opportunities relative to the company’s societal impact and based on this,
develop the management response.
4.1 Identify priority areas for action
4.2 Consider possible management responses and prepare recommendations for management
4.3 Decide on way forward
4.4 Develop indicators to monitor progress
While active stakeholder engagement is listed as optional in Step 3, the Framework does encourage
companies to engage with stakeholders. In the event that companies see too many risks in engaging in
Step 3, Step 4 advises companies to consider actions that would facilitate an active engagement process
with stakeholders the next time they carry out the assessment in the area.
Appendices
Page | 9

Appendices
Page | 10
Introduction
In the spring of 2006, the WBCSD embarked on a two-year effort to develop a framework to help measure
and assess the contribution of business to economic and broader development goals in the societies
where business operates. This grew out of a request by WBCSD member companies to develop a
measurement framework that could underpin the license to operate, improve the quality of stakeholder
engagement, help manage risks more effectively and identify ways to enhance the business contribution
to society.
The companies requested a clear and practical measurement methodology that could be adapted to
different business sectors, be used by operations anywhere on the globe and be tracked over time. The
resulting Measuring Impact Framework is designed to help companies understand their contribution to
development and use this understanding to inform their operational and long-term investment decisions
and have better-informed conversations with stakeholders.
Unlike environmental impact assessments (EIAs) or environmental, social and health impact assessments
(ESHIAs) that are normally carried out as part of due diligence to determine future potential impacts
arising from a greenfield or brownfield business investment, the Measuring Impact Framework aims to
measure actual impacts at any stage in the life cycle of an operation.
Figure 1 – Measuring Impact integration with ESHIAs
The Framework’s output is not designed to be rolled up for corporate reporting purposes. However,
companies may choose to communicate results to external audiences and use the assessment to improve
the quality of their reporting.
Primary users
The output from the Framework is designed for company decision-makers on a site or product line, and/or
at a country level. The assessment itself should be carried out by a skilled practitioner (internal or
external) with company involvement. While the Framework has been developed for operational managers,
different people within the company, such as procurement and tax advisors, may also use the Framework
to refine company policy and/or strategies.

Framework approach
The framework is based on a four-step methodology that attempts to merge the business perspectives of
its contribution to development with the societal perspectives of what is important where that business
operates. It is rooted in a business approach and begins with measuring what business does through its
business activities.
Figure 2 – Four-step methodology
STEP 2 - Measure
How to use this Methodology
There is no “one size fits all” way to use this methodology. It is designed as a guide to a learning journey
that will help companies better understand their societal impacts. Companies can consider iterating back
to different steps of the Methodology at any time during the assessment if they feel the information
gathered is not sufficient to move forward. For example, it may be necessary to add more business
activities, redefine the geographic area of assessment, and/or refine the indicators to emphasize the key
impacts.
In order to appropriately tailor it to the business and its operating context, as well as ensure follow-up
actions are taken, companies are encouraged to make the assessment as participative as possible,
consulting people both within and if possible external to the firm. Due to the fact that the methodology
asks companies to look across a variety of business activities and assess the way they interact with each
other and impact development, it is important that the assessment involve many different functions within
the organization.
STEP 1 – SET BOUNDARIES
Determine the scope and depth of the overall assessment in terms of geographical boundary (local versus
regional) and types of business activities to be assessed.
STEP 2 – MEASURE DIRECT AND INDIRECT IMPACTS
Identify and measure the direct and indirect impacts arising from the company’s activities, mapping out
what impacts are within the control of the company and what it can influence through its business
activities.
STEP 3 – ASSESS CONTRIBUTION TO DEVELOPMENT
Assess to what extent the company’s impacts contribute to the development priorities in the assessment
areas.
STEP 4 – PRIORITIZE MANAGEMENT RESPONSE
Based on steps 2 and 3 extract the key risks and opportunities relative to the company’s societal impact,
and based on this, develop an appropriate management response.
Appendices
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STEP 1 –
Set
boundaries
STEP 3 – Assess
contribution to
development
management
response
Measuring Impact Framework
Decision by individual companies
Stakeholder
engagement

While active stakeholder engagement is listed as optional in Step 3, the Framework does encourage
companies to engage with stakeholders. In the event that companies see too many risks in engaging in
Step 3, Step 4 advises companies to consider actions that would facilitate an active engagement process
with stakeholders the next time they carry out the assessment in the area.
The business activities
The business activities included in the Framework are based on input from WBCSD member companies.
They are grouped into four clusters:
1. Governance Sustainability – the governance and sustainability policies and practices
followed and managed by the company. It includes the business activities of Corporate
Governance and Environmental Management.
2. Assets - the creation of assets or resources by a company for use by individuals, groups or
institutions, which have value beyond their creation. It includes the business activities of
Infrastructure and Products Services.
3. People - the human side of business operations, including the people employed and trained
Appendices
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by the company. The business activities include Jobs and Skills Training.
4. Financial Flows - The financial contribution of a company to the community in which it
operates. The business activities include Procurement and Taxes.
Detailed descriptions of the business activities and relationship to development are given below.
GOVERNANCE SUSTAINABILITY - Corporate Governance
The OECD states, that “Corporate Governance involves a set of relationships between a company’s
management, its board, its shareholders, and other stakeholders. Corporate governance also provides
the structure through which the objectives of the company are set, and the means of attaining those
objectives and monitoring performance are determined.”12 The Measuring Impact Framework builds on
the OECD principles of Corporate Governance to include the governance procedures, principles and
practices concerning the way in which a business operates. It emphasizes business ethics, voice and
accountability and compliance with international and national standards on issues concerning relations
with employees, government, the local community and suppliers with reference to pertinent human rights
and International Labour Organization (ILO) conventions.
Relationship to development
Corporate governance may impact various aspects of economic and societal development. It is most
closely linked with country governance, human rights and economic growth, but depending on the local
context it can have a large impact on poverty alleviation, social stability, public health and environmental
sustainability among other issues. At an institutional level, businesses can help to raise standards of
governance in a country by being transparent and implementing good practices across industries and
geographic areas. On the other hand, business can hinder good country governance if it engages in
corrupt practices and other illegal processes. The importance of a well-functioning public governance
system for the achievement of development goals such as economic growth and poverty alleviation has
been well documented by various international agencies (e.g., World Bank, OECD and Transparency
International).
At a societal level, allowing individuals to voice concerns is central to the UN conventions on human
rights. The opportunity to participate in elections and/or company stakeholder consultations affects the
ability of individuals and groups to improve their lives. However, according to Amartya Sen in
Development as Freedom,3 institutional rights to exercise voice (such as to participate in elections or in
company stakeholder consultations) will remain void as long as certain conditions remain unfulfilled
(e.g., if the electorate cannot obtain independent information prior to taking a stand on a particular
issue). Therefore, the ability of stakeholders to make their voice heard depends not only on their formal
rights and institutional channels to express their views, but also on their degree of social and economic
empowerment. Impeding factors may include: lack of access to information due to language barriers,
lack of social organization due to civil conflict, and the marginalization of certain groups due to their
social status (e.g., women, certain castes, etc.). Raising standards of living through the provision of jobs,
training, etc. at an individual level helps people to exercise their rights by, for example, making one’s
voice heard.

Relevance to specific industries and local contexts
Corporate governance is an important concern for any company. Some aspects depend on the relative
influence of a company on a social group (e.g., the scale of the operation in a country and the depth of
the interactions with stakeholders). Certain geographically localized industries such as the extractive
industries may pay particular attention to their exchange with local communities, while companies selling
products into a developing country may focus on additional aspects of corporate governance including a
company’s responsibilities to consumers.
Related activities Every business activity
Appendices
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GOVERNANCE SUSTAINABILITY - Environmental Management
Environmental management encompasses all the policies, procedures, and practices that a business
uses to comply with applicable environmental requirements, to mitigate its environmental impact and to
continuously improve its environmental performance. Good environmental management by businesses
contributes to a region’s or geographic area’s overall environmental sustainability. Environmental
sustainability is the long-term maintenance of ecosystem services and resources for future generations.
Achieving environmental sustainability equates to meeting the needs of the present without
compromising the ability of future generations to meet their needs. It includes keeping population
densities within the carrying capacity of a region, facilitating the renewal of renewable resources,
conserving and establishing priorities for the use of non-renewable resources, and keeping
environmental impacts below the level required to allow affected systems to recover and continue to
evolve. How business interacts with the environment is a key determinant in its ability to maintain its
license to operate, innovate and grow.
Environmental management by one or more businesses can be a key factor in achieving environmental
sustainability in a society, and enhancing economic and social development in a region. Business, its
stakeholders, and its neighbors cannot function if ecosystems and the services they deliver, such as
water, biodiversity, food, raw materials and climate, are degraded. Supportive frameworks and
regulations are necessary to put sustainable environmental practices in place and observe them.
Business can and often does provide solutions (including technologies) to many of the problems that
threaten the environmental sustainability of a region. Combining environmental and economic
operational excellence to deliver goods and services with lower environmental impacts and higher-quality-
of-life benefits is a key sustainable development strategy for business.
The impact of environmental management practices on development varies significantly by industry and
local context. For example, operations of a fossil fuel-fired power plant may require minimal land while
logging operations rely on extensive land areas and can have greater biodiversity issues. Conversely,
power plant operations usually have greater air quality and solid waste issues compared to sustainable
logging practices.
Related activities Every business activity
ASSETS - Infrastructure
Infrastructure relates primarily to the physical systems of a country or community. It includes roads, rail
lines and other transport infrastructure, energy services, Internet and telecommunications (ITC), water,
sanitation, schools, health facilities, etc.4 These systems are considered essential for enabling economic
activity. In the context of this Framework, this business activity will address the creation, maintenance
and use of infrastructure aimed at meeting business needs which may or may not be used by the
community. Companies wishing to assess the impacts of infrastructure that they deliver and/or operate
as a profit-making venture should use the Products and Services business activity.
Physical infrastructure and accompanying services are believed to facilitate primary, secondary and
tertiary productive activities that in turn promote economic and social development. Infrastructure
improvements are considered vital for industrial productivity, trade facilitation and economic
development, as well as improvements in people’s quality of life, health, education and skills
development. The lack of appropriate infrastructure can hinder economic growth, and in many
developing countries it constitutes a major obstacle to development.
While infrastructure development has a number of potential positive impacts on society, the construction

of a road, as an example, can also contribute to a rise in vulnerability for certain populations as it creates
access to previously remote areas where ecosystems services and the associated sources of livelihoods
for indigenous peoples can be put at risk. Large infrastructure projects can also lead to the displacement
of people which can in turn impact community cohesion and economic security.
Companies require infrastructure to conduct their daily activities (e.g., roads to transport goods, water for
production, sanitation for use by employee, etc). In many developing countries, available infrastructure is
not sufficient to meet all the business needs. In these cases, the business often creates infrastructure to
serve its operational needs. This has ramifications on the surrounding populations. In some cases,
members of the community are also able to use the infrastructure while in other cases the infrastructure
remains solely for company use. The infrastructure may remain in place for the lifetime of the operation
and may be left at the public’s disposal after a company has left the area.
The creation of new infrastructure and the maintenance and use of existing infrastructure are particularly
important in developing countries with weak government capacity to address such issues. The type of
infrastructure used or created may vary between business sectors.
Related activities Products and Services, Environmental Management and Jobs.
The WBCSD paper The Role of Business in Tomorrow’s Society states that the “fundamental purpose of
business is to provide continually improving goods and services for increasing numbers of people at
prices that they can afford.”5 Products can range from fast moving consumer goods (FMCG) packaged
for sale to households, to housing and transport targeted at individuals, to real estate, infrastructure and
heavy machinery sold to industrial customers. Services are work performed by an entity for the benefit of
a customer. These range from the provision of basic services such as water, education and health to
telecommunications and financial services.
Products and services have the potential to impact development in a number of ways. Many basic needs
like food, housing, sanitation and electricity can be met through access to products and services. In its
basic form a house provides shelter from the elements while an everyday household item such as soap
contributes to hygiene and can reduce the spread of disease. The indirect impacts of products and
services include the knock-on effects of the direct impacts products and services have on customer’s
income and overall standard of living, as well as on the health and well-being of a broader set of
stakeholders including families and communities. The purchase of a house can create equity for the
owner, against which other loans can be secured, thereby resulting in a significant improvement in the
family’s overall sense of well-being for example. The impact of soap may prevent a family from falling ill
and thus allow adult family members to be more productive and children to attend school.
The impact of products and services on development is most significant when they are being made
available in the assessment area. Thus, extractive industries producing a commodity for a global market
are likely to find this activity less relevant to their business activities, while industries like consumer
goods, transport, communications and construction will find this topic particularly relevant to their
impacts on development.
Related activities Corporate Governance, Jobs, Procurement, and Environmental Management
Appendices
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ASSETS – Products Services
PEOPLE - Jobs
Jobs focuses on the number and type of full-time and part-time employees (local vs. non-local) and the
salaries and benefits paid in order for the business to operate. It also looks at social protection
components, such as occupational safety and health and conditions of work (i.e., working time and sick
leave). It also includes jobs created in the supply chain and induced employment derived from employee
spending.6
Job creation is a key contribution of business to development. Equally, employment generation is a key
factor in the efforts of any nation to develop. Jobs provide an opportunity for people to enter the cash
economy and generate income for purchasing basic goods (e.g., food, water, clothes, housing,
education and healthcare) to support their family. Even low levels of spending can subsequently
stimulate entrepreneurial activity through the creation of small enterprises that can help to trigger further
economic benefits.

Developing nations in particular often have high levels of unemployment, which creates vulnerability
among populations and places an enormous burden on society. As a result, the prospect of a company
setting up an operation in a particular location is often welcomed by local communities where job
creation is expected.
The creation of employment does not always lead to positive benefits. Significant problems can result
from poor employee conditions and recruitment practices, including high levels of migrant workers, as
well as gender or race discrimination. The type of job (e.g., skilled, manufacturing, administrative, etc.)
plays an important role in determining the extent of the impacts on an area.
Job creation helps promote economic development in all countries, sectors and contexts and will
therefore be relevant to any company/operation. Conditions that might warrant increased attention
include areas with high local unemployment, low numbers of skilled workers, increasing costs of
recruitment/employment, and/or increasing civil unrest. Equally, where a company or operation is
considered to have a large presence locally or nationally, whether this is matched by a high level of
employment or not, the impact (or not) of jobs on development should be considered.
Related activities Corporate Governance, Procurement and Skills and Training
Appendices
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PEOPLE - Skills and Training
Skills and Training refers to on-the-job and off-the-job training, as well as community capacity
development activities and educational assistance programs provided by a company.
On-the-job and off-the-job-training are typically limited to employees and contractors of the company.
Acquiring particular skills and training is directly related to obtaining employment. Continual training
within a field builds capacity for individuals to become experts, thereby increasing their employability and
upward mobility. From a company perspective, developing skills in a particular field ensures that they
can meet their needs.
The provision of educational assistance to employees and community members provides opportunities
for enhanced skill development and technical or professional certification. This creates greater
employment potential for those individuals and potentially greater capacity on the part of those
individuals to create employment for other community members in the region. From a corporate
perspective, it facilitates a supply of future qualified and skilled candidates to satisfy their demands in the
region. However, it may also precipitate a movement of qualified individuals away from the region in
search of better opportunities elsewhere.
Community capacity development may focus on improving productivity, health and well-being within the
community through better use of technology, raising literacy levels and/or building language skills. While
these skills have the potential to increase the productivity and income of the community members, it is
also important to keep in mind the effects on traditional culture, roles and way of life.
Business-led skills and training programs are customized to a business’ particular needs. While they
may include broad skills, they may also be very specific depending on the business’ location, priorities,
contribution to the economy and business models. In some cases, the business needs and the
community needs may differ and this should be kept in mind as a business evaluates its impacts.
Related activities Procurement and Jobs

Appendices
Page | 16
FINANCIAL FLOWS - Procurement
Procurement is the purchase of goods and services for the company. Most companies engage in
procurement as part of their day-to-day business, often contracting larger suppliers and distributors into
their value chain. These suppliers may in turn contract small- and medium-sized enterprises (SMEs) that
may or may not operate according to the ultimate client company’s policies. In some cases large
companies also contract directly with SMEs.
Procurement creates business for a company’s suppliers. This leads to further economic activity,
including jobs in the supply chain,7 as suppliers engage other suppliers to meet their needs for additional
inputs, and as suppliers’ employees spend a portion of their wages in their communities.
The extent to which procurement has an impact on a particular location (town, province, country)
depends on the amount of procurement in the supply chain that is sourced from that location, as well as
the size of the company’s activity relative to the local economy.
Procurement and related activities to improve suppliers’ ability to meet company needs can also help
transfer technology and higher standards to suppliers. This in turn allows suppliers to better serve other
customers and may lead those suppliers to raise standards further along the supply chain. It can also
significantly increase the competitiveness of these suppliers in seeking business with other companies.
Many developing country governments recognize the potential positive impact that procurement can
have on the local/national economy and thus encourage or require certain levels of “local content” in
company procurement. Companies may also have their own policies in this regard.
This is relevant to all business sectors. Companies without operations in developing countries may
procure supplies from these countries. In such circumstances, companies may provide assistance to
help their suppliers meet certain technical, environmental and ethical standards. They are also exposed
to reputational risks if their supply chain does not conform to their standards and actions are not taken to
address this.
Companies with operations in developing countries may face additional demands from the host
government to maximize local procurement. Such requirements can be difficult to fulfill if a company’s
operations require specialized inputs that cannot easily be sourced within the country without investing
heavily in local suppliers. Providing assistance to local suppliers may help the company develop a more
reliable and cost-effective local supply base, as well as strengthen its license to operate.
Related activities Jobs, Corporate Governance, Environmental Management and to some extent
Skills and Training.
FINANCIAL FLOWS - Taxes
According to the OECD, a tax is “a mandatory and unrequited payment to government at any level (i.e.,
national, regional or municipal). More specifically, it is all payments to governments (national, regional
and municipal), borne and collected,8 reported by country or region in the year of payment (where
appropriate) and categorized per material categories.
The terms borne and collected have been carefully chosen, not only to ensure that the entire tax
footprint is captured, but also to address concerns about double counting. It is particularly important that
companies consider this in relation to taxes collected and remitted to government, as these same taxes
will often also form part of the calculations of another tax payer. An example of this would be value
added tax.9
In addition to payments to governments, companies will at times be in receipt of payments from
governments. These receipts may be broadly divided into three types:
• Tax rebates or repayments are merely the return of tax previously paid, in recognition of the
agreement of the tax liability being settled. These will often be recorded as a reduction in the tax
payable by the company, rather than being seen as a separately disclosed item;
• Incentives are built into the tax system, such as research and development tax credits or tax
holidays. These often take the form of a reduction in tax payable, rather than an actual payment by

government, and may not be easily distinguished from other elements of the calculation required to
ascertain the tax liabilities of a company. Therefore, it may prove difficult to separately identify these
items, although clearly their impact will be included in the overall tax burden.
• Subsidies, awards or grants do not arise as a direct result of the tax system, and might reflect an
incentive to make capital investment in a particular region. If material, these would be part of the
GRI G3 economic indicators.10
Taxes also include the personal taxation payments of employees and suppliers.
Companies contribute to the economy of a country through taxes (corporate, employee and suppliers)
as well as other payments to governments. The impact of this tax contribution on development depends
hugely on the system used by the government to redistribute taxes collected.
Tax has traditionally been viewed by management and shareholders as a cost to business. However,
more recently companies and investors are starting to acknowledge the importance of tax payments in
creating a stable economic and social backdrop and thus a more stable business environment, as the
quote below indicates. Jon Symonds, chief financial officer of AstraZeneca, the drugs company, recently
called on business to “view tax as an investment rather than a cost. Companies paying zero tax would
find it hard to complain about the failing educational system, poor transport and infrastructure, he said.
‘In this context, business’s attitude to tax may need to change.’”11
Increasingly the focus is not just on how much tax is being paid but on a company’s overall tax strategy.
In particular there is increasing demand for greater transparency around both tax strategy (at group and
country level) and tax payments. Many companies have choices about which countries to invest in and
how to arrange their tax affairs, within the rules defined by governments. However, for some businesses,
and particularly those in the extractive industries, the location of operations is determined by external
factors such as where natural resources exist.
Governments also have choices about how they wish to operate their tax systems, which are often used
as a means to incentivize more investment by business. These issues are explained more in the report
“Responsible Tax”12 and “Taxes: The Global Picture.”13
Companies’ contribution to taxes is relevant in all sectors.
Related activity Corporate Governance
Appendices
Page | 17

STEP 1 – Set
boundaries
STEP 3 – Assess
contribution to
development
STEP 2 - Measure
management response
Objective of Step 1: Define your business.
Stakeholder Engagement
Minimum Level: No active stakeholder engagement is required for this step. The company is
encouraged to carry out passive stakeholder engagement by requesting data from institutions and
academia around national/regional development plans, poverty reduction strategy papers, etc.
Alternatives: Companies may choose to identify key stakeholders at this stage and engage these
stakeholders in a more proactive way to ensure that the background information collated is more
accurate and relevant for the assessment area. Companies may even want to go as far as to
define the development priorities (Step 3.2) at this stage through active stakeholder engagement.
Process
1.2 Define the geographic area of assessment
1.3 Collect development context information and list key issues for the assessment area
1.4 Select business activities to be assessed
Appendices
Page | 18
Step 1 Set boundaries
The Framework Methodology begins by helping
companies set the scope and depth of the
assessment. It is important that companies set
realistic boundaries for this assessment based
both on their available resources and the
company’s overall objectives of the assessment.
While the primary over-arching objective of this methodology is to improve decision-making, companies
may be focused more specifically on mitigating risks, identifying new investment opportunities or
strengthening relations with specific stakeholders.
Some considerations when identifying appropriate objectives for this assessment include:
• Business sector
• Risks and opportunities to business
• Stage of operation (e.g., country entry, temporary brownfield expansion, end of life cycle)
• Size of operation
• Overall business strategy.
The objective(s) may lead companies to adapt parts of the methodology to meet these goals. Companies
are encouraged to revisit the objectives at each step to appropriately tailor the step and to ensure that the
assessment results and management responses meet the original objective(s).

1.2 Define the geographic area of the assessment
The Measuring Impact Framework can be used at a local, regional and/or national level. Companies
should identify the geographic area of assessment on the basis of the scale of the operation, overall
company strategy and the scale or reach of the predicted impacts. A local assessment may focus on the
communities surrounding an operating site. A regional assessment may include several
communities/cities or potentially an entire province/state where that business operates. A national level
analysis would focus on business impacts relative to government and/or national priorities. As an
example, an operation that employs a large number of people in a community but has no operations
elsewhere may choose to only focus on the local area around the business operation.14 Some questions
companies may want to consider in defining the geographic area include:
• Does company infrastructure stand on coastland, farmland, village, etc?
• Where do company supplies and resources come from?
• Where do employees of the operation come from? Do they come from or interact with any
Appendices
Page | 19
neighboring communities?
It may be helpful to identify key stakeholders at this point through a stakeholder mapping exercise.15
Box 1 – How do you define local?
The Global Reporting Initiative notes that “the geographic definition of ‘local’ may vary because, in some
circumstances, cities, regions within a country, and even small countries could be reasonably viewed as
‘local’.”16 The definition of “local” will depend on the purposes of measurement. For instance, if the
company is trying to measure local impact for government authorities, the definition may use the
jurisdictional boundaries of the authority in question. If the purpose is to compare the impact of different
units within the company, the definition may encompass the sales or operations territory of each unit. If
the facility is a pipeline or road, the “local” area may be defined in terms of a corridor along the route. It is
important to consider the way stakeholders define local. A few key factors to keep in mind when defining
the local area:
• Jurisdictional boundaries of the area
• Scale and reach of business operation and influence
• General relationship and dependency of the communities or districts.
1.3 Collect development context information for the assessment area
In Step 1, companies are encouraged to build a robust profile of the development landscape including key
facts, trends and issues for the assessment area. Information on ten example development issues is
included in the Appendix.
a) Context - Some information needed to build a robust country/local profile include:
• Political/regulatory aspects – governance structure, legal system
• Demographic aspects – gender, race, age, religious structure of population, population distribution
• Economic aspects – growth rates, historical trends, formal/informal employment levels, key
industries, inflation levels
• Social aspects – access to basic services, public vs. private provision of services, poverty levels,
availability and quality of housing
• Ecosystems aspects – natural resources, seasonal changes, natural disasters
b) Issues - The following questions will help the company identify the key development issues:
• What are the key drivers influencing the facts and trends in this area?
• What are the key barriers to resolving these issues and making progress on the development
issue?
Good sources of information: National/regional development plans and Poverty Reduction Strategy
Papers,17 World Bank Doing Business reports,18 UN reports such as Human Development Report,19 as
well as local government planning papers. Companies may choose to engage stakeholders identified in
step 1.2 to help gain a better understanding of the key issues in the area.

1.4 Select the business activities to be assessed
This Framework proposes eight business activities for assessment grouped into four clusters. Companies
can choose to add to this list as appropriate.
1. Governance and Sustainability (Corporate Governance and Environmental Management.)
2. Assets (Infrastructure and Products Services)
3. People (Jobs and Skills Training)
4. Financial Flows (Procurement and Taxes)
Social investment programs (donations, partnerships with NGOs for social projects and other activities)
can also be included in the assessment. Companies can either choose to integrate social investment into
the different business activities (e.g., creation of a school could be included under infrastructure) or they
can create a separate business activity called social investment which would assess all the related
impacts arising from social investment
activities. If companies choose to
Box 2 – Recommended process for selecting business
integrate social investment into their core
activities
business activities, it is important that
they distinguish between the impacts
Companies are encouraged to hold a workshop with local
arising from them. This will ensure that
management, including the operations manager and
the management response identified in
functional experts from departments such as procurement,
step 4 appropriately reflects the capacity
human resources, security, etc. Companies can use Figure
of the business to manage these
3 to visualize responses.
impacts.
Companies can select the business activities for assessment based on the following criteria:
a) Importance to the business (high or low): The business sector, location, size of the operation relative
to other businesses in the area and the scale of each of the business activities should help determine
how important they are to that particular business operation. The key guidance question for
determining the importance: Is the business activity something that is critical to the success of the
operation?
b) Perceived impact (high or low): Companies should consider the scale and reach of the different
business activities and the likelihood that each activity is having a high or low impact on the area
where they operate. The following are some guidance questions to determine the significance of the
impacts of a business activity on society:
• Is this business activity likely to impact society beyond those directly affected (e.g., people
Appendices
Page | 20
employed by the firm)?
• Are there likely to be short- and long-term impacts from the activity?
If the business activity is of high importance to the business and likely to have a high impact, companies
are strongly encouraged to take this activity forward to Step 2. As a third criteria, companies may want to
consider the importance of this business activity to stakeholders. Companies are strongly encouraged to
assess the activities in the cluster of Governance Sustainability as they address issues cutting across a
number of other business activities (e.g., EHS training under Skills Training).
Companies can choose to assess only a few business activities at first and then iterate back to add further
business activities for assessment at a later stage.

Define geographic area
of assessment
Information about operation
Key stakeholders
local regional national
Business activities analysis
Importance
to business
Perceived impact
on area
important to stakeholders
Company access to natural resources is very important to the successful operation of power
plants. Also, perceived to have a high impact on communities.
Appendices
Page | 21
Table 1 – Example of output from Step 1
Identify opportunities to leverage existing activities to enhance the livelhoods of the
communities surrounding operation
Project description
Identify objectives
of assessment
Approximately 120,000 inhabitants in neighboring communities with majority living in urban
areas. Per capita income is lower than average for state but employment levels are on par
with state. Migration to area is on the rise putting pressure on basic services.
General profile of area
Development context
Key issues
5 hydro electric ower plants - 10 years old
Employees; neghboring communities; local government
Population growth (over-crowding); Poor quality health care services available to community;
low levels of income per family; high levels of corruption in government; weak provision of
public services
Importance
to stakeholders
Company has created infrastructure to support its operations which is also perceived to have
an impact on the community. The company is also interested to explore ways to leverage the
work of other actors to expand its creation of infrastructure for the wider benefit of the
communities.
Infrastructure
Environmental
Management
Corporate Governance Company's ethical principles, relations with government and communication with community
members is very important to the operation. Also, corruption is a barrier to effective business
and hinders community development.

Figure 3 – Example importance versus impact graph for the business activities
The following graph can be used to visualize and prioritize the business activities for selection. As in
the example below, companies may decide not to select business activities that the Framework
strongly encourages the company to assess. In this case, the company should explain the rationale
for this decision. Those business activities with an * are also important to stakeholders.
Encouraged to assess: Strongly encouraged to assess:
Skills Training
Corporate Governance
Products Services
Infrastructure
Environmental Management *
Jobs *
Procurement Taxes *
Appendices
Page | 22
l o w h I g h
P e r c e i v e d i m p a c t o n a r e a
I m p o r t a n c e t o t h e b u s i n e s s
Not critical to assess: Encouraged to assess:
l o w h i g h

STEP 1 – Set
boundaries
STEP 3 – Assess
contribution to
development
STEP 2 - Measure
management response
Objective of Step 2: Measure the footprint of your company
Stakeholder engagement
Minimum level: No active stakeholder engagement is required for this step. However some of the
qualitative indicators may need some level of stakeholder input through interviews, surveys, etc.
Alternatives: Companies can choose to engage stakeholders in the process of identifying the key
indicators and mapping the linkages.
Process
2.3 Measure
Appendices
Page | 23
Step 2 Measure direct and indirect impacts
This step aims to help companies map their direct
and indirect impacts and identify relevant indicators
to measure the extent of these impacts. The direct
impacts of a company on society can be inputs or
outputs that arise from the day-to-day activities of a
company, such as the creation of jobs within the
firm, or the sale of a product, or the adherence to a
certain code or standard. Direct impacts are to a
large extent within the control of a company. These
direct impacts can combine to have “knock-on” or
indirect impacts such as the creation of jobs within
the supply chain or improved quality of life for the
consumers who buy the product or service. Indirect
impacts are within a company’s influence.20
Before companies begin measuring their impacts, they need to identify what aspects of each selected
business activity are likely to generate the key “sources of impact”, and therefore which aspects require
further investigation. For example the “Infrastructure” business activity could be broken down into the
following sources of impact:
• Creation of infrastructure by the company
• Use of existing infrastructure by the company
• Maintenance of existing infrastructure
Appendix 2 provides example breakdown of the business activities into “sources of impact”. Companies
may need to adapt and/or refine these for their respective operation.
Measuring direct and indirect impacts requires quantitative and in many cases qualitative indicators. The
OECD defines an indicator as a Quantitative or qualitative factor or variable that provides a simple and
reliable means to measure achievement, to reflect the changes connected to an intervention, or to help
assess the performance of a development actor.21 An indicator may be data used by analysts/companies
and organizations to describe situations that exist or to measure changes or trends over a period of time.
They are descriptions of conditions or of performance that may provide insights into matters of larger
significance beyond that which is actually measured.
Identifying the “best” indicators to measure direct and indirect impacts is difficult and may require experts
in the field of econometrics and statistics. In some cases, companies may want to use ready-made

multipliers. Appendix 2 lists a number of indicators for each business activity along with additional
sources of information that companies can use to further refine and/or develop their own indicators.
Companies are encouraged to tailor the indicators to their specific business activity, operation and area of
assessment.22 However it is important that companies use the REM (relevant, easy, measurable) criteria23
to identify the most appropriate indicators.
Box 3 – Recommended process for identifying
and mapping indicators
Companies can consider holding a workshop with
internal experts and local management to identify
indicators and map linkages. Collecting data and
carrying out interviews will most likely require field
research. As a result, the company may choose to
engage a researcher/consultant/expert to help
carry out this step. Creating a visual such as
Figure 4 may be particularly helpful in the
discussions.
Appendices
Page | 24
• Relevant to the operation, activity, objectives and location
• Easy to track over time24
• Measurable through quantitative metrics or
qualitative surveys and interviews.
Indicators should reflect both positive and negative
impacts resulting from business activities. When
choosing appropriate indicators for measurements,
companies are encouraged to map out the linkages
between the key direct impacts and subsequent
knock-on or indirect impacts. A visualization tool
such as the one in Figure 4 may be helpful to do
this.
Figure 4 – Example impacts and linkages arising from the “infrastructure” business activity
In the example below, the company has placed the indirect impacts at two levels to demonstrate its
relative influence over the impacts. This is not a perfect science but is intended to help companies
map out their key impacts before they identify appropriate indicators to measure these impacts. As
demonstrated in the visual, the company puts pressure on water infrastructure through a couple of
different avenues: construction of roads which leads to migration as well as the company use of
existing infrastructure.

2.3 Measure
Measuring impacts requires both quantitative and qualitative data gathering expertise. Where data is not
available, there may be a need to develop questionnaires and/or conduct household surveys within the
area of assessment. Many of the direct impacts are likely to be found in company reports, while others
may require field research. If company resources do not permit extensive field work at this stage, they can
wait until they have identified the development priorities in Step 3 before measuring impacts. However, it
should be noted that any communication with stakeholders in Step 3 is likely to be more effective if there
is some hard data upon which to base the conversation.
Appendix 3 presents a measurement example where a score is applied to each direct impact. Companies
may find this helpful for the Corporate Governance and Environmental Management business activities
where they are assessing compliance against a standard (a negative score implies that the business is out
of compliance, a neutral score implies it is in compliance, and a positive score implies that it is going
beyond compliance).
An example of indicators and respective measurement results is given in Table 2. There may be cases
where indicators are repeated. This can occur when several direct impacts share a common knock-on
effect such as “pressure on water infrastructure”. It is important to recognize when indicators are repeated
so as not to measure twice. It is also possible for companies to extend the indirect impacts out into third or
fourth level impacts. However, the further the impacts extend beyond the direct level, the less accurate
and more difficult it is to measure and attribute impacts to the company.
In the example below, no distinction is made between first and second level indirect impacts. It is
important that companies use a diagram such as figure 4 to map out the results chain and see the key
linkages between the impacts.
Table 2 – Example measurements and indicators for the “Infrastructure” business activity
Reduction in air quality increase in PM-10
Appendices
Page | 25
Infrastructure
Sources of impact Direct impacts Measurements Indirect impacts Measurements
Community use of
company telecomms
10% of local families
with access
10 families are able to
participate in remote
learning opps
Source of impact 1
(construction of roads
and bridges)
Source of impact 3
(Use of existing
infrastructure)
Company use of existing
sanitation infrastructure
30,000 liters of water
per year
Pressure on water
infrastructure
3 to 2 hour reduction in
water availability per
day
Opportunities for
remote learning
Source of impact 2
(Telecommunications
some made available to
the public)
Investment in roads and
bridges
Pressure on water
infrastructure
3 to 2 hour reduction in
water availability per
day
Pressure on health
system
average waiting time
increased by 2 hrs at
health clinics
$ 10 million
population growth rate
increase 5% per year
increased congestion
25% increase in travel to
and from communities
per day
Increased migration
Reduction in water
quality
10ppb arsenic in water
Growth in informal
sector SMEs
50 SMEs
Increased access to
markets and health
services
travel time reduced by
5 minutes

STEP 1 – Set
boundaries
STEP 2 - Measure
STEP 3 – Assess
contribution to
development
management response
Objective of Step 3: Understand your company footprint in the development context
Minimum level: If companies perceive that the risks resulting from stakeholder engagement outweigh
the benefits of engaging, the companies can use the development issues identified in Step 1 to build a
hypothesis of the business contribution to development. Companies who choose not to engage
stakeholders will not be able to test their hypothesis (step 3.4).
Recommended level: A representative group of stakeholders can be engaged to assist the company in
prioritizing the development issues for the assessment area. The company then builds a hypothesis of
its contribution towards these priorities before engaging the same group to review and further refine
their assessment.
Process
3.4 Test hypothesis with stakeholders and refine overall assessment (optional)
Appendices
Page | 26
Step 3 Assess business contribution to development
This step builds on the business’ perspective of its
impacts by assessing to what extent these impacts
contribute to economic and social development within
the assessment area. To do this the company must
try to understand what is important or represents
“value” in development terms to the stakeholders in
the assessment area. As a result, active stakeholder
engagement is recommended in this step.
However, recognizing that circumstances vary from
location to location and company to company, this
step can also be undertaken with more limited
stakeholder engagement. If this route is taken the
company should consider the types of follow-up
actions in Step 4 that could facilitate a higher level of
stakeholder engagement in the future.
Based on the development issues identified in Step 1 and the results of Step 2, companies should
determine what level of stakeholder engagement they will take in Step 3.
Companies are encouraged to engage with the stakeholders in the assessment area (based on
stakeholders identified in Step 1). However this process does need to be managed carefully as
stakeholder expectations may be raised by the engagement process. Companies should stress that this is
a learning process for both themselves and the stakeholders.
If companies perceive too many risks with an active process of stakeholder engagement, they can use the
development issues identified in Step 1 to build a hypothesis of the business contribution to these issues.
This could arise for example in a country-entry situation where it may not be viable to identify and engage
with a broad group of stakeholders, or in a situation where one or two “hot” issues might get in the way of
an open discussion. Companies can also choose to build the hypothesis first in order to enhance their
knowledge of the likely development contribution and then use this to determine the associated risks and
opportunities related to further stakeholder engagement.

3.2 - Engage with
stakeholders to
identify
development
priorities
Yes No
3.3 - Build hypothesis of
contribution to
development priorities
3.4 - Test hypothesis with
stakeholders
Appendices
Page | 27
Figure 5 – Assessment process for different levels of stakeholder engagement
Companies can engage with stakeholders to identify development priorities. In some cases, this may
involve ranking the development issues identified in Step 1, while in other cases it may require creating a
new list of tailored priorities. It is important that both parties (the company and the stakeholders) view this
process as a way to create a shared understanding of development priorities and the associated business
contribution. The company should be careful not to set expectations that it will take action on these
priorities.25 Companies should also keep in mind that some of the development priorities identified by
stakeholders may not include the areas where the company believes it has the most impact. As a result,
the company can consider adding to the list of stakeholder-identified development priorities to ensure it
captures the full extent of its impacts.
The Framework includes ten development issues that may be helpful as a starting point for the discussion
with stakeholders on development. These are discussed further in Appendix 4 and in the WBCSD report
Doing Business with the World.26 The issues covered in Appendix 4 include:
1. Capacity Building
2. Economic Growth
3. Education
4. Enterprise Development
5. Environmental Sustainability
6. Governance
7. Human Rights
8. Poverty Alleviation
9. Public Health
10. Social Stability
3.1 Decision
on active
stakeholder
engagement?
Go to 3.3 - Build
hypothesis of
contribution to
development issues
Decision on
further
stakeholder
engagement?
Move to Step 4
No
Yes
Move to Step 4

Stakeholders, particularly at the national and international level, may also refer to other internationally
agreed standards, declarations and principles such as the Millennium Development Goals (MDGs). The
MDGs are summarized in Appendix 5 and the UN Global Compact Principles and associated international
declarations are summarized in Appendix 6.
Box 4 – Guidance on stakeholder engagement for identifying development priorities
Recommended process
Convene a workshop that has broad representation from government, civil society and private sector
stakeholders from the target area (as identified in Step 1). The workshop format will facilitate the
agreement of a common set of development priorities and a common understanding of the
development context. Consider:
• Consulting with a few trusted stakeholders prior to the workshop to help identify the appropriate
This process takes the measurements from Step 2 and frames them in the development context to build a
hypothesis about the company’s contribution to the development priorities identified in Step 3.2. It accepts
that attribution is difficult and that any one company is likely to be one of many actors contributing to a
development priority.27 As noted in Step 3.1, if the company has chosen not to engage stakeholders, they
will build a hypothesis of their contribution to development issues identified in Step 1. When developing
the hypothesis it is important to recognize synergies between the development priorities (i.e. a case where
a contribution to one development priority – improved access to potable water – affects another
development priority – such as health.)
The hypothesis is a subjective assessment by the business that is designed to be tested with stakeholders
in Step 3.4. There are two parts to building the hypothesis:
3.3.1 The first part determines the key linkages between what the company does (based on the
business activities and associated impacts defined in Step 2) and the development
priorities/issues. This should answer the questions: Is the business contributing to this
development priority/issue? And if so, how (through which impacts) is it contributing?
Companies can choose to qualify these linkages as strong and weak.28
3.3.2 The second part determines whether the company is contributing in a positive or negative way
to achieving the priorities/issues. It answers the question: To what extent is the company
contributing to the development priority/issue? Companies can also choose to include an
assessment of the magnitude29 of the contribution (high/low).
Step 3.3.1 is illustrated in Figure 6. Here the linkages are assessed between the sources of impact from
the “Infrastructure” business activity, the impacts along the results chain and the three example
development priorities of “SME development”, “access to quality healthcare” and “environmental
sustainability”.
Appendices
Page | 28
mix of stakeholders to invite and the format for the workshop
• Asking workshop participants to prepare information to share at the workshop through, for
example, presenting existing development plans or the development activities of their sector
• Using a third party facilitator to encourage full participation at the workshop and prevent the
workshop becoming overly company-centric
• Identifying a third party convener (government, academic institute, etc) of the dialogue and allow
the company to participate as one of many other participants.
Alternatives
If open stakeholder engagement is not possible or not favored, companies may engage a smaller
number of “trusted” stakeholders. Be aware, however, that different stakeholders may have different
priorities and this approach could alienate other groups and may not give a holistic picture of
development needs.

Figure 6 – Example linkages between the sources of impact arising from “Infrastructure” and the
In the example below, the company has identified the key linkages between the impacts and the
development priorities labeling some as strong and weak. As an example, pressure on water
infrastructure has a strong link to environmental sustainability. However, in this case it has a weaker
link to access to quality health care. In other words, the company believes that the pressure on water
infrastructure may contribute to access to quality health care, but there may be so many knock-on
effects and factors influencing this contribution, it is hard for the company to be sure about its
contribution relative to others.
In Step 3.3.2 each chain of impacts that were identified above is then assessed in terms of its
development contribution. The proposed definitions to determine the contribution are as follows, although
these can easily be tailored to individual circumstances and/or existing company terminology:
Positive (green) Impact supports the achievement or enhancement of the development
Appendices
Page | 29
priority
Negative (red) Impact hinders the achievement or enhancement of the development
priority
Definitions that may be helpful to determine the magnitude of the contribution are as follows:
High Contribution is far reaching, touching many people and resources in the
assessment area
Low Very few people/resources are impacted in the assessment area
Example output from Steps 3.3.1 and 3.3.2 linking the “Infrastructure” business activity to the “SME
development” priority and the “Access to quality health care” priority are illustrated in Tables 3 and 4. In
this example, the company does not have any direct links to the development priorities. The company
contributes through its indirect impacts, some of which are first level and second level indirect impacts.

Table 3 – Example hypothesis of business contribution - “Infrastructure” to the “SME development”
development priority
Infrastructure Hypothesis
Sources of impact Link Direct impacts SME development Rationale
high
Pressure on health system = average waiting time
increased by 2hrs at health clinics
Increased congestion = 25% increase in travel to and
from communities per day
Indirect impacts Link
Through growth in informal sector SMEs,
congestion and access to markets
Through growth in informal sector SMEs
Appendices
Page | 30
Pressure on water infrastructure = 3 to 2 hour reduction
in water availability
no link
high
Investment in
roads and bridges
= $10 million
Sources
of impact 1
(Construction of roads and
bridges)
link throught
another impact
low
link
Community use
of company
telecomms = 10%
of local families
with access
Source
of impact 2
(Tele-communications some
made available to the
public)
link throught
another impact
Opportunities for remote learning = 10 families are able
to participate in remote learning programs over the
Internet
link
Company use
of existing
infrastructure =
30'000 liters per
year
no link
in water availability a day
no link
Reduction in water quality = 2ppb arsenic in water
Through opportunities for remote learning
SME development Rationale
Some families and small businesses have been
able to do remote learning and boost skills
no link
Increased migration and overall greater
movement of people into and around the
community has increased spending in the
community and supported entrepreneurial
activities
Increased access to markets and health services= travel
time to nearby market reduced by 5 minutes
With greater access to markets thanks to
improved roads and bridges, more families are
setting up small businesses in the area
SME development
Growth in informal sector SMEs = approx. 50 SMEs
Rationale
SME development
link throught
another impact
low
link
Increased migration =
population growth rate increase 5% per year
no link
Congestion is making it more difficult to trade
within the assessment area
Reduction in air quality = increase in PM-10
Source
of impact 3
(Use of existing
infrastructure)
link
no link
Rationale

Table 4 – Example hypothesis of business contribution - “Infrastructure” to the “access to healthcare”
development priority
Infrastructure Hypothesis
Growth in informal sector SMEs = approx. 50 SMEs no link
Pressure on health system = average waiting time
increased by 2hrs at health clinics
link high
Through pressure on health system
Appendices
Page | 31
in water availability a day
link low
Reduction in potable water available in health
clinics
Access to quality
health care
Rationale
Reduction in water quality = 2ppb arsenic in water link low
Increase number of water-borne infectious
diseases
Opportunities for remote learning = 10 families are able
to participate in remote learning programs over the
Internet
no link
Source
of impact 3
(Use of existing
infrastructure)
Company use
of existing
infrastructure =
30'000 liters per
year
link throught
another impact
Through reduction in water quality and pressure
on water infrastrucutre
Source
of impact 2
(Tele-communications
some made
available to the
public)
Community use
of company
telecomms = 10%
of local families
with access
no link
Access to quality
health care
Rationale
Increased access to markets and health services= travel
time to nearby market reduced by 5 minutes
link high
Travel time to nearest health clinic reduced by
road improvements
in water availability
link low
Reduction in potable water available in health
clinics
Increased congestion = 25% increase in travel to and
from communities per day
no link
Reduction in air quality = increase in PM-10 no link
The influx of migrants has put pressure on
existing health clinics, making it difficult to
meet needs
Access to quality
health care
Rationale
Increased migration =
population growth rate increase 5% per year
link throught
another impact
Through pressure on health system
Sources of impact Direct impacts Link
Access to quality
health care
Rationale
Sources
of impact 1
(Construction of
roads and bridges)
Investment in
roads and bridges
= $10 million
link throught
another impact

Table 5 below summarizes a completed analysis for each of the selected development priorities. It also
illustrates how the company can positively contribute to development through the knock-on effects from
one of its impacts – in this case “increased migration of people to remote areas”, while this impact can
lead to a negative knock-on effect relative to another development priority.
Table 5 – Summary hypothesis of business contribution arising from the “Infrastructure” business activity
Infrastructure Hypothesis BEFORE testing
SME development
high
Contribution to Development
Access to quality
health care
low
Sources of impact Direct impacts Indirect impacts
Investment in roads
and bridges
Increased migration
Increased congestion
Reduction in air quality
Pressure on health system
Pressure on water
infrastructure
Appendices
Page | 32
low
low low
Company use of Reduction in water quality
existing
infrastructure
Source
of impact 3
(Use of existing infrastructure)
high
low high
Increased access to markets and hospitals high high
Environmental
sustainability
high
Growth in informal sector
SMEs
Pressure on water infrastructure
low
low
Source
of impact 2
(Tele-communications some
made available to the public)
Community use
of company
telecomms
Source of impact 1
(construction of roads and
bridges)
Opportunities for remote learning
3.4 Test hypothesis with stakeholders and refine overall assessment
Once companies have built their contribution to development hypothesis they can test it with stakeholders.
While the goal of stakeholder engagement is to test the hypothesis, companies can also use the
engagement to get a better understanding of the interplay among the actors in the area. The objectives of
testing the hypothesis are to:
• Confirm or amend the assessment of the company contribution on the basis of a dialogue with
stakeholders
• Identify any key perceptional differences between the stakeholders and the company on the
business contribution. For example, a perceptional difference could arise if the company believes
it is making a positive contribution to environmental sustainability by going beyond the applicable
environmental standards on emissions, but the stakeholders remain concerned about the health
impacts of the smoke coming from the stack.
Stakeholder comments and any key differences in opinion/perception between the company and
stakeholders should be recorded, as in Table 6 below, along with any agreed changes to the hypothesis.

Results of test
Contribution to Development
Appendices
Page | 33
Table 6 – Example change to hypothesis after stakholder engagement
high low
Stakeholders argued
successfully that the
number of informal SMEs
set up was overestimated
by the company and the
contribution of these
informal SMEs to overall
SME development was
quite limited. In addition,
they argued that migrants
coming into the area
spend very little money
locally.
Source of impact 1
(construction of roads and
bridges)
Investment in
roads and bridges
Increased migration
Growth in informal sector
SMEs
Sources of impact Direct impacts Indirect impacts
SME development
Comments from
stakeholders
Infrastructure
The overall assessment can be summarized using a matrix that also captures key stakeholder comments.
See Table 7 below. This summary will form the basis for preparing the management response in Step 4.
Table 7 – Summary matrix from Step 3
Overall assessment - Development priorities and business activities
Business activities
Development priorities
SME development Access to quality health care Environmental sustainability Development priority 4
Negative
As the roads created by the
company cause more traffic in
and out of the community the air
quality has worsened. Company
use of infrastructure has also
polluted the water having
potential long term effects on
sustainability in the area.
Stakeholder
comments
Stakeholders argued that the
increase in access to markets has
only made a minor contribution to
SME development.
Stakeholder indicated that the
construction of roads has made a
great contribution to improved
access to hospitals and there
have been remarkable
improvements in public health as
a result.
Agreed for the most part with the
assessment
Stakeholder
comments
Infrastructure
Overall
contribution
Positive
By making some
telecommunications
infrastructure available to the
public, families have been able to
take part in remote learning,
boosting their skills and
capacities to run businesses. The
construction of roads and bridges
has also enabled more people to
access markets. The business
believes this is leading more
families to set up businesses as
they see a market for any goods
they produce. Increased
migration and overall greater
movement of people into and
around the community has
supported entrepreneurial
activities.
Mixed
Although the company has
improved access to hospitals
along with markets through the
creation of roads and bridges it is
putting a lot of pressure on
existing infrastructure either
directly or indirectly through its
own use of sanitation
infrastructure or the influx of
migrants that have been
attracted to the area.
Stakeholder
comments
Business activity 2
Overall
contribution
Business activity 3
Overall
contribution

STEP 1 –Set
boundaries
STEP 3 – Assess
contribution to
development
STEP 2 - Measure
management response
Objective of step 4: Make better-informed decisions
Minimum level: Stakeholder engagement is not required for this step if only internal measures are being
considered to manage the issues identified. Where solutions are likely to involve/impact other
stakeholders (e.g., development of a social investment program), it is important that stakeholder input
be sought. If stakeholders are not involved, the company risks developing inappropriate measures.
Alternatives: Companies can choose to engage stakeholders in the identification of possible strategies
to optimize their contribution as well as in the selection of indicators to monitor progress. By doing this
they should be able to create a shared understanding of what the company can and cannot do relative
to the development priorities and how this relates to the future contribution from other stakeholders.
Process
4.2 Consider possible business responses and prepare recommendations for management
4.4 Develop indicators to monitor progress
Appendices
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Step 4 Prioritize management response
Step 4 completes the Framework by helping
companies prepare a management response. It is
important that companies review their original
objectives for the assessment and modify Step 4
accordingly to ensure that these objectives are
addressed.
Based on the company’s understanding of its contribution to development and comments from
stakeholders, it can identify priority areas for action. This can be done by identifying the key risks and
opportunities arising from the assessment. To do this companies can choose to visualize the key impacts
relative to each of the development priorities in a graph like Figure 7 where the significance of the
contribution from a key indicator/impact is plotted against the level of control that the company has over
that indicator/impact. Based on this the company would then prioritize the impacts where they have most
control and/or were seen to be making a negative contribution (such as “pressure on existing
infrastructure”). When identifying key risks and appropriate responses, it is also important to consider the
company’s dependency on the development priority. As an example, a company may want to consider
how important SME development is to the business operation. Companies can also use other types of
risk matrices or a strengths, weaknesses, opportunities, threats (SWOT) type analysis of their contribution.

Strong response :
mitigate or improve
high -ve low -ve low +ve high +ve
4.2 Consider possible responses and prepare recommendation to management
When companies consider ways to manage risks and/or capitalize on opportunities, it may be helpful to
consider three different categories of response:
• Action through core business activities – Companies can consider how they can modify their
business practices in a way that mitigates and/or enhances impacts within the assessment area.
For example, are there any targeted activities that would help with specific stakeholders? How
could they partner with others to leverage business activities and strengthen any positive
contributions to society?
• Action through social investment programs – Companies can consider creating or revising a social
investment program in the area. For example, what kinds of programs/projects would be
complementary to the business activities where they have a positive impact on society? Is there a
social investment project that would help alleviate a negative impact from their business activities?
• Action through communication – Companies can consider if more could be done to communicate
and discuss their societal contribution to stakeholders. This can help when there are perceptional
differences between the company and the stakeholders. If the company chose not to engage with
stakeholders in Step 3, it may want to set up a communications program that would allow this to
happen as part of a future assessment.
Listed overleaf are some example approaches that companies could consider to further optimize their
societal contribution.
Appendices
Page | 35
Figure 7 – Key impacts contributing to the “access to quality healthcare” development priority
Key
Response :
consider enhancing
Response :
maintain or consider scaling up
Strong response :
look for ways to increase control,
consider partnering and/or influencing
external factors to mitigate or enhance
Response :
leave it or consider ways to increase
control
Minimal response :
maintain
1 - Increased access to markets
2 - Pressure on existing infrastructure
7 - Impact from business activity 7
B u s i n e s s i n f l u e n c e o v e r i m p a c t s
l o w h i g h
C o n t r i b u t i o n t o a c c e s s t o q u a l i t y h e a l t h c a r e
3 - Reduction in water and air quality
4 - Impact from business activity

Box 5 – Example of a partnering strategy to support SME Growth: International Finance Corporation
The International Finance Corporation (IFC) is implementing a set of “SME Linkages” programs that are
designed to increase the capacity of local SMEs to supply both the major project developer as well as
other large firms in the area. IFC intervenes to help address the causes of market failures such as
information failures (imperfect information exchange about supply opportunities and required quality
standards), externalities (SMEs may be unwilling to pay for training for fear of losing employees to
competitors), supply-side failures (SMEs may be unable to respond collectively to major client
requirements), risk aversion (purchasers and professional service providers may perceive high risks in
dealing with SMEs), and credit-market imperfections (SMEs may have inadequate access to finance to
fund business improvements).
Access to finance is a particular challenge for SMEs and thus a component of many advisory programs
aimed at them. Several interesting initiatives address this vital concern.
The Cajamarca program in Peru, for example, has used two new financial arrangements, a guarantee
fund and an unsecured microloan program, and the BTC program in Azerbaijan is implementing a fund to
make investments in SMEs in the oil, gas, and food processing sectors. But some challenges remain. In
particularly small markets, such as Mozambique, the formal SME sector is so small that there is little
incentive for banks to develop significant expertise to deal with it. One solution may be to develop a
regional initiative in collaboration with a bank active throughout southern and eastern Africa. In many
countries where linkage programs are run, corruption and a lack of transparency pose major barriers to
local firms winning business contracts. Again, several innovative programs address this issue. SMEs that
participated in the Mozlink program set up a new business association—the Mozambique Business
Network—partly because they felt all existing business associations were self-serving clubs for a few firms
already well in with government. In Peru a portion of the linkage budget was used to finance a program to
simplify the license registration system in Cajamarca province; the monthly rate of SME registrations then
trebled. In Chad, the linkage program launched an e-procurement scheme to allow local SMEs to bid for
ExxonMobil contracts.
Large firms can make life easier for local SMEs in several ways without lowering quality standards. They
can purchase a range of general products (uniforms, local raw materials, small equipment) and services
(catering, non-specialized cleaning, transportation) from local SMEs that may not be able to provide highly
specialized equipment. They can divide contracts or encourage groups of SMEs to come together as joint
producers. And they can help SMEs overcome cash-flow problems by making advance payments and
settling invoices quickly.
Large firms also can push their SME suppliers to improve performance standards and the range and
quality of their supplies. For example, Mozal has introduced the ISO14000 environmental standard for its
operations and is now requiring its local suppliers to meet the same exacting standards. It also helped
SMEs manufacture uniforms that meet a higher standard and use special materials not previously
available in Mozambique.
While these are clearly benefits to the large firm, the SME Linkage program also address concerns typical
of local economic development in the communities where large firms operate. The impact on jobs and
income created can be significant.
From 2004 to 2007, the IFC has assisted SME suppliers in 40 countries succeeded in securing 1,291 new
contracts, or US$ 234 million in procurement value.
For further information see “IFC, Linkage Programs to Develop Small and Medium Enterprises” at
www.ifc.org/ifcext/rmas.nsf/Content/MonitorSeries
Appendices
Page | 36

Box 6 – Example strategies for enhancing the contribution of procurement to enterprise growth
Company procurement practices are critical to how much local impact arises from business operations.
Below are some examples of interventions companies can make to improve the sustainability of their local
content.
• Undertake a survey to understand the extent of goods and services that your company could source
Appendices
Page | 37
locally. Maintain a database of potential local suppliers including notes about their technical
assistance needs.
• Redesign products and/or processes in ways to use more local goods and services. For example,
designing smaller work packages better suited to the capabilities of local SMEs.
• For larger work packages with international suppliers, encourage local procurement and use of joint
ventures that promote technology transfer to local firms.
• Engage in transparent and competitive bidding while ensuring that the potential local suppliers have
adequate information about the company’s supply needs, including required standards. The company
could consider supplying this information at a “one-stop” business center run by the company or in
conjunction with others.
• Help suppliers avoid over-dependence on your company by helping them improve their abilities and
widen their customer base (some specific measures in this regard are listed in the next section).
• Consider partnering with other development actors to provide capacity building support to potential
suppliers to help them prepare bids and develop other relevant business skills.
• Look for innovative approaches and partnerships to assist suppliers in accessing credit.
• Work with host governments on incentives to increase local content.
• Work with government and others to enhance the overall business climate, e.g., improving business
skills, improving the ability of banks to assess credit risk and improving the capacity of local
government agencies.
Box 7 – Example strategy for improving skills: Eskom in South Africa
Due to past practices in South Africa, a majority of people were disadvantaged in finding job opportunities.
Eskom developed employment equity policies to redress the situation in line with the Employment Equity
Act of 1998. Eskom committed to transforming its profile to represent the demographics of the country.
For example, recognizing a lack of technically skilled women, the company launched the Eskom- Warwick
Academic Program, giving 40 women (and at a later stage 50) the opportunity to obtain a master’s level
business/engineering degree. The company formulated race and gender quotas, and in 1999 recruited
during its first intake 40 women science graduates who wished to pursue a career in management and
technology to follow an 18-month, full-time postgraduate master's degree program. A second group of 50
women was recruited in 2001. The objectives of the program were to:
• Teach these women the skills necessary to enable them to take on technical and managerial
leadership positions within the company
• Give them a deep understanding of how the company operates and expose them to all of the
business, political, economic and social challenges facing managers in South Africa
For further information see www.eskom.co.za

Box 8 – Example strategies for mitigating negative impacts on human rights
According to the UN’s Universal Declaration of Human Rights, human rights refer to the basic rights and
freedoms to which all humans are entitled. Examples include civil and political rights, such as the right to
life and liberty, freedom of expression and equality before the law; and social, cultural and economic
rights, including the right to participate in culture and the right to work and the right to education. As such it
is a critical societal issue for business. Companies operating in developing countries where institutions
and the rule of law are not well developed are particularly exposed to human rights issues and abuses.
Below are some examples of actions that companies can take to improve their human rights performance.
Please note that the appropriateness of these actions will vary depending on location.
Employees
• Ensure that employees have a written employment contract, that they are free from harassment, and
Appendices
Page | 38
that their working conditions are acceptable
• Respect freedom of association and the right to organize
• Implement an employee hotline to raise ethical and/or human rights issues
• Discipline employees who harass other employees or community members
Security
• Commit to and implement the Voluntary Principles30 on security and human rights
• Where security is provided by government organizations: carry out risk assessments that consider
their human rights record; consult with them regularly about the impact of the security arrangements
on local communities; share with them the company’s desire to preserve human rights; support efforts
to provide human rights training to government security forces; encourage them to be transparent
about security arrangements; and report any allegations of human rights abuses by government
security forces to appropriate government channels
• Where security is provided by private security firms: review the background of the potential providers;
include the Voluntary Principles as contractual provisions; ensure that they are adequately trained;
and monitor their performance
• Consider the implications very carefully before agreeing to supply any equipment to police and public
or private security forces – especially lethal equipment such as weapons and ammunition. If
equipment is supplied, consider how to reduce risks by agreeing what training should be given, what
procedures will be put in place for its use, and how its use will be monitored
• Do not allow company equipment and vehicles to be used by police, army or others in their military or
security operations
Community engagement
• Consult with the principal local stakeholders about the company’s activities. Start consultation early in
the business or project concept and design phase and continue it regularly through the whole life cycle
of the project
• Put a transparent grievance process in place; ensure that grievances are dealt with fairly and
promptly, and that decisions are communicated to the community/the plaintiff
• Log and fulfill commitments made to the local community
• Where economic displacement or physical resettlement takes place as a result of the company’s
activities, ensure that people’s rights are not infringed in the process and that a fair compensation is
agreed
• Where there are vulnerable populations such as indigenous people, elderly, the very poor, disabled
etc., ensure that they take part in consultation and that their interests are represented
• Where community members’ human rights have been infringed upon by the company, take steps to
redress the damage
Human rights assessment activities
• Ensure that any human rights awareness-raising initiatives are appropriate for the social and cultural
circumstances in the assessment area
• Ensure that local stakeholders are involved in any human rights assessment exercise, for example
agreeing locally relevant indicators
• Collect human rights data at regular intervals and involve experts in the process
• Regularly ask principal stakeholders whether they perceive any changes as a result of the company’s
activities and what their views are on the company’s approach to human rights

Companies are expected to follow their own decision-making processes, including associated approval
levels for any changes to operating philosophy and/or financial implications.
4.4 Develop new indicators to monitor progress
Companies should identify indicators that could be used to monitor progress on the actions taken in Step
4.3. To do this companies are encouraged to engage with key external stakeholders to make sure that
there is a shared understanding of what constitutes progress. They may also be able to assist other
stakeholders in identifying key indicators to track progress on other related development outcomes where
the company may be only one of many contributors.
Appendices
Page | 39

Summary Introduction Step 1 Step 2 Step 3 Step 4 Appendices
References
Page | 40
Appendices
Appendix 1: Glossary
attribution
Represents the extent to which observed development effects can be attributed to a specific
intervention/activity or to the performance of one or more partners taking account of other interventions,
(anticipated or unanticipated) confounding factors, or external shocks.
www.oecd.org/dataoecd/29/21/2754804.pdf
baseline data
Data gathered that describes the relevant existing conditions of an area such as physical, biological,
socio-economic, and labor. This can serve as the foundation against which future assessments are
evaluated.
www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/pol_PerformanceStandards2006_glossary/$FILE/Glossar
y+of+Terms.pdf
benchmark
Reference point or standard against which performance or achievements can be assessed.
Note: A benchmark refers to the performance that has been achieved in the recent past by other
comparable organizations, or what can be reasonably inferred to have been achieved under the
circumstances.
business activity
Activity that a business carries out to support its commercial or operational purposes/objectives. Eight
business activities are included in this Framework broken down into four clusters: Assets, People,
Financial Flows and Governance Sustainability.
counterfactual
The situation or condition that hypothetically may prevail for individuals, organizations or groups if the
business were not present.
inclusive business
A sustainable (profitable) business that also benefits low-income communities. Examples include the
engagement of low-income communities through direct employment, through the development of local
supply chains and service providers, or by providing affordable goods and services that target the low-income
segment.
www.wbcsd.org/development
development issues
The facts and trends concerning development in a given area (global, country, region, local area). A key
source for global development issues is the annual UNDP Human Development Report. The WBCSD
methodology has identified ten development issues as examples (see Appendix 4). Issues are
distinguished from priorities in this framework whereby priorities are identified through active stakeholder
engagement.
The development issues that have been prioritized through a process of stakeholder engagement. In
some cases, the priorities may also be internationally accepted priorities such as the Millennium
Development Goals (see Appendix 5).
impact
The effect that arises from carrying out a specific activity. It can comprise changes, whether planned or
unplanned, positive or negative, direct or indirect, primary and secondary, that a program or project helped
to bring about.
www.un.org/Depts/oios/mecd/mecd_glossary/documents/evaluation_category.htm#causal_relationship

direct impacts
Impacts largely within a company’s control. These impacts can be inputs or outputs that arise from
the day-to-day activities of a company. Examples include: creation of jobs within a firm, the sale of
a product or the adherence to a certain code or standard.
indirect impacts
Impacts not in the company’s control but within the company’s influence. They can also be
characterized as “knock-on effects” of the direct impacts. They may include the creation of jobs
within the supply chain or a change in the quality of life for the consumers who buy a product or
service. It can also be seen as the additional value derived by other firms (small and large) that
deal with the company.
www.ifc.org/ifcext/sme.nsf/Content/Linking_SMEs_to_Investments
indicator
The OECD defines an indicator as a quantitative or qualitative factor or variable that provides a simple
and reliable means to measure achievement, to reflect the changes connected to an intervention, or to
help assess the performance of a development actor. An indicator may be data used by
analysts/companies and organizations to describe situations that exist or to measure changes or trends
over a period of time.
logical framework (logframe)
Management tool used by many development actors to improve the design of interventions, most often at
the project level. It involves identifying strategic elements (inputs, outputs, outcomes, impact) and their
causal relationships, indicators, and the assumptions or risks that may influence success and failure. It
thus facilitates planning, execution and evaluation of a development intervention. Refer:
monitoring
Refers to the regular checking of progress against a plan. It involves the continuous or frequent collection
and analysis of information on performance after an intervention has been introduced.
www.worldbank.org/urban/local/toolkit/docs/m5/lm/module-5-lm-1.pdf
needs assessment
An analysis of stakeholder needs as a basis for building a project or program. Needs assessments are
typically performed prior to interventions and development programs as a way to understand the status of
populations and build appropriate interventions/programs.
poverty reduction strategy papers (PRSPs)
These are prepared by countries through a participatory process involving domestic stakeholders as well
as international development partners, including the World Bank and International Monetary Fund.
Updated every three years with annual progress reports, PRSPs describe the country's macroeconomic,
structural and social policies and programs over a three year or longer horizon, as well as associated
external financing needs and major sources of financing.
www.imf.org/external/np/prsp/prsp.asp
qualitative data
Information that is not easily captured or represented in numerical form. Qualitative data typically describe
people's opinions, knowledge, attitudes or behaviors.
quantitative data
Information measured or measurable by, or concerned with, quantity and expressed in numerical form.
Quantitative data typically consists of numbers.
References
Page | 41

results chain
The sequence of impacts and interactions that result from an activity or intervention and lead to an
unexpected or desired outcome. According to the OECD this begins with inputs, moving through activities
and outputs, and culminating in outcomes, impacts, and feedback.
social investment
Company investments focused specifically at community development (e.g., through donations,
partnerships, company sponsored activities, etc.).
sources of impact
The specific aspect of a business activity a company wishes to assess. Each business activity selected
can be broken down into various sources of impact. For example, the “use of existing infrastructure by a
company” is a source of impact under the business activity “Infrastructure”. A company identifies the
sources of impact it assumes influences relevant development issues in the area of assessment.
stakeholder
Stakeholders are defined broadly as those groups or individuals: (a) that can reasonably be expected to
be significantly affected by the organization’s activities, products, and/or services; or (b) whose actions
can reasonably be expected to affect the ability of the organization to successfully implement its strategies
and achieve its objectives.
www.globalreporting.org
stakeholder engagement
A process whereby a company interacts with a stakeholder, either actively or passively. Active
stakeholder engagement can occur through interviews, discussions and/or some form of direct
communication where the stakeholder is aware the company is carrying out an assessment. In passive
stakeholder engagement, a company interacts with stakeholders by accessing information provided by
stakeholders. An example of this could include the collection of data and statistics from local government
offices and development agencies to build a local socio-economic profile. No direct communication occurs
between the company and stakeholders related to the assessment.
stakeholder mapping
A process whereby all the stakeholders who are interested in, impacted by, or who have an impact upon
the company’s operations are identified.
References
Page | 42

Appendix 2: Additional sources of information for Step 2
The information in this Appendix is intended to help companies develop appropriate indicators to measure
the direct and indirect impacts of their business activities on the societies in which they operate. The lists
of indicators are examples to serve as a starting point for companies; they are not exhaustive lists. As
companies tailor the assessment to their specific operation/sector, they can use the information in this
Appendix and develop it further. As more and more companies develop their indicators, it is hoped that
these indicator lists will expand over time, potentially with a more detailed breakdown for different sectors.
Abbreviations used in the tables include:
# “number of”
% “percentage of”
$ “monetary amounts”
* Refers to a Global Reporting Initiative (GRI) indicator
Y/N “Yes or No”
Each list of indicators for direct and indirect impacts is followed by additional useful references to
customize the indicators for a particular context and/or industrial sector. The following references are
cross-cutting sources of information that companies may find useful:
IFC Standard Indicators, www.ifc.org/ifcext/rmas.nsf/Content/StandardIndicators
GRI G3: Sustainability Reporting Guidelines, www.globalreporting.org
Measuring Unilever’s economic footprint: The case of South Africa, Jan 2008, www.wbcsd.org
Unilever and Oxfam, Unilever in Indonesia: links between international business and poverty
reduction? Dec 2005, www.wbcsd.org
GOVERNANCE SUSTAINABILITY
Due to the compliance nature of the activities under Governance Sustainability, scorecards are provided
in Appendix 3 to help companies rate their compliance with local, national and/or international standards.
GOVERNANCE SUSTAINABILITY - Corporate Governance
When developing indicators to measure the impact of corporate governance policies and practices,
particularly the adherence to codes and standards, it is important to consider how the company interacts
with governmental bodies. The extent of the impact will largely depend on the scale and reach of the
company and its external influence in the assessment area. Company compliance with laws, emphasis on
transparency and commitment to engaging the community could lead to greater disclosure, improved
enforcement of existing laws and more open communication with the government. In the same respect,
weak enforcement of anti-corruption policies within a company can prop up corrupt governments and
hinder democratic processes.
Assessing a company’s respect for human rights is also critical to gaining a comprehensive picture of the
impacts of a company’s governance practices on an area. Indicators for “measuring” respect for human
rights require qualitative descriptions. The Danish Institute for Human Rights has developed a Human
Rights Compliance Assessment with a selection of indicators for companies to use to assess their respect
for and promotion of human rights. www.humanrightsimpact.org
References
Page | 43

References
Page | 44
Table A-1 - Example sources of impact and indicators for corporate governance
Direct impacts (indicators) Indirect impacts (indicators)
Source of impact: Public policy and compliance
• Monetary fines and sanctions due to non-compliance
(GRI SO8: Compliance)
• Participation in public policy development and lobbying
(GRI SO5: Public Policy)
• Financial and/or in-kind contributions to political parties
or institutions (GRI SO6: Public Policy)
• Changes to regulatory frameworks (e.g., # of new
laws introduced pertaining to higher standards;
changes in fines for non-compliance to business in
area)
• Changes in government allocation of resources to
public services
Source of impact: Transparency and disclosure
• External reporting – financial and non-financial (e.g., #
of reports; qualitative information about issues
addressed in reports)
• Internal communication (e.g., information provided on
division of responsibilities within company (Y/N))
• Changes in public and employee perceptions
(surveys)
• Changes to industry-specific disclosure practices
by government (number and types of changes)
Source of impact: Code of conduct and corruption control
• Anti-corruption policy and zero tolerance for corruption
practices (Y/N)
• Business units analyzed for risk of corruption (GRI SO2:
Corruption)
• Employees trained in anti-corruption policies (GRI SO3:
Corruption)
• Actions taken in response to corruption (GRI SO4:
Corruption)
• Changes in government allocation of resources to
public services
• Country corruption perceptions index rating
(Transparency International)
Source of impact: Labor standards and rights of workers
• Protection of workers’ rights (e.g., compliance with four
core labor standards: Abolition of child labor, freedom
of association, elimination of discrimination and forced
and compulsory labor31)
• Availability of communication channels and complaint
mechanisms (Y/N)
• # of complaints by employees
• Response time to complaints (e.g., hours/days since
complaint)
• Employee satisfaction, empowerment, self-esteem
(e.g., # of protests, strikes, complaints; surveys)
Source of impact: Engagement with local community
• Availability of communication channels and complaint
mechanisms(Y/N)
• # of consultation with communities on issues of concern
or affecting community32
• # of complaints by communities
• Response time to complaints (e.g., hours/days since
complaint)
• Community perception, acceptance and trust of
company (e.g., # of protests, intentional damage
and/or demonstrations on/near property,
complaints)
Source of impact: Monitoring of suppliers
• Existence of human rights screening of suppliers (GRI
HR2: Investment and Procurement policies) – (Y/N)
• % of suppliers that have undergone environmental
screening
• Supplier enforcement (e.g., # of suppliers disqualified)
• Results of supplier audits/monitoring
Source of impact: Responsibility to Consumers
• Customer health and safety, product labeling,
marketing communication, customer privacy (GRI
PR1 – PR8: Product Responsibility Performance)
• #, type and quality of customer services available (e.g.,
surveys)
• # of complaints/lawsuits, response time to
complaints/lawsuits
• Consumer awareness (surveys)
• Customer satisfaction (GRI PR5: Product Labeling)

Source of impact: Develop Global Partnership for Development (MDG 8) and Global Compact Principles
• # of Partnerships • Monitoring results of partnership programs
References
Page | 45
(surveys, evaluations)
Links to additional indicators and references on corporate governance
AccountAbility, Responsible Competitiveness Index, www.accountability21.net
AccountAbility, Development as Accountability, 2006, www.accountability21.net
Business Leaders Initiative on Human Rights, Matrix - www.blihr.org/Pdfs/GIHRBM_Matrix.pdf
Danish Institute of Human Rights, Human Rights Compliance Assessment,
www.humanrightsbusiness.org/040_hrca.htm
Freedom House, Freedom in the World: Annual global survey of global political rights and civil liberties,
www.freedomhouse.org
IBLF and IFC, Guide to Human Rights Impact Assessment and Management, 2007 (road test draft), www.iblf.org
IFC Performance Standards www.ifc.org/ifcext/enviro.nsf/Content/PerformanceStandards
Kaufman, Daniel, Aart Kraay, and Massimo Mastruzzi, Governance Matters V: Aggregate and Individual Governance
Indicators for 1996-2005, World Bank, September 2006.
OECD Corporate Governance Principles,
www.oecd.org/document/49/0,3343,en_2649_34813_31530865_1_1_1_1,00.html
Transparency International, Corruption Perceptions Index, www.transparency.org
UNCTAD, Guidance on Corporate Responsibility Indicators in Annual Reports (TD/B/COM.2/ISAR/41), 2007,
www.unctad.org/isar
World Bank, Doing Business Report, www.doingbusiness.org
World Bank Institute, Quality of Governance Metrics: Six indicators, www.govindicators.org
ISO, ISO 9004:2000 - Quality Management Standards, www.iso.org
ISO, ISO 26000, (to be published in 2010),
isotc.iso.org/livelink/livelink/fetch/2000/2122/830949/3934883/3935096/home.html?nodeid=4451259vernum=0
GOVERNANCE SUSTAINABILITY - Environmental Management
When developing indicators to measure the impact of environmental management practices, companies
need to consider both the ecosystems they rely on to deliver their business activities (such as clean
water), as well as the impacts on the environment arising from their operations. Poor harvesting or
unsustainable sourcing practices lead to the degradation or depletion of resources resulting in an
unsustainable business model. In contrast, sustainable resource management practices and/or application
of technology can help preserve vital ecosystems, which in turn continue to supply the company’s
production needs for an indefinite period. In addition to the company’s own impacts, it is important to
evaluate suppliers’ environmental management policies and practices.
It is also important to consider the social and economic dimensions of environmental management. In
particular, companies should look at the impacts of their environmental management efforts on
employment, health, provision of public services, and indigenous rights, etc. In doing so, the company will
gain an understanding of how its actions affect the capacity of other stakeholders to preserve vital
ecosystems.

References
Page | 46
Table A-2 – Example sources of impact and indicators for environmental management
Source of impact: Environmental management services and standards
IFC Performance Standards 1.14 –1.26 and 3.7
• Compliance (% of facilities, average rating)*
• Environmental Training Workshops (number/yr., %
participation)
• Environmental Management Systems (% complete,
% of facilities)
• Local environmental recognition (number of awards)
• # of local direct or indirect suppliers adopting EMS
systems
Source of impact: Land use and biodiversity
IFC Performance Standards 6.5 – 6.13 and 7.13
• Land Use (HA, HA/ton product, ton/HA)
• Land Restoration (HA)
• Ecosystem Biodiversity (number of species)
• Protected/High Biodiversity Land Use (HA, %)*
• Brownfield Site (HA, %)
• Changes in # and type of species
• Quantity of land used by local suppliers to provide
products/services to entity (hectares)
• Land restoration by local suppliers (Y/N) and amount
(hectares)
Source of impact: Hazardous material use and management
IFC Performance Standards 3.6, 3.12 – 3.15 and 4.7
• Hazardous Materials Use (kg, kg/kg product)
• Alternative Non-Hazardous Material Use (kg, kg/kg
product, %)
• Pesticide Use (kg, kg/hectare)
• # and severity of incidents of toxic exposure related
illness among workers and surrounding community
• Changes to water quality due to pesticide use
• # of food safety incidents related to toxics
• Amount of hazardous wastes generated by local
suppliers to provide products/services to entity
(kilograms)
Source of impact: Material resource use
IFC Performance Standards 3.4 and 6.14 – 6.16
• Total Raw Materials Use (ton, ton/ton product)*
• Alternative Raw Material Use (ton, %)
• Recycled Materials Use (ton, ton/ton product)*
• Raw Material Contamination (g/ton)
• Packaging Material Use (kg, kg/kg product)
• Rate of depletion of available landfill space
• Emergence of reclaim or recycling associated
businesses (Y/N)
• Changes in emissions due to transportation of raw
material or waste
• Amount of recycled materials local suppliers use to
provide products to entity (kilograms)
Source of impact: Water use
IFC Performance Standards 4.9 and 6.17
• Total Water Withdrawal (l, l/ton product)*
• Manufacturing Water Consumption (l, l/ton product)
• Wastewater Reuse (l, l/ton product)
• Non-Product Waterborne Output (kg, kg/ton)
• Groundwater Management Impacts (volume
affected)
• Changes to availability of and access to potable water
• Changes to # of local aquatic organisms
• Adoption of water use minimization by local suppliers
of products/services (% of suppliers)
• Quantity of water minimized by local suppliers as a
result of water use minimization programs (cubic
meters/year)
Source of impact: Energy resource use
IFC Performance Standards 3.4
• Total Energy Consumption (MJ, MJ/ton, ton/MJ))*
• Electricity Consumption (kWh, kWh/ton)*
• Total Fuel Consumption (MJ, ton, MJ/ton, ton/MJ)
• Non-Fossil Fuel Consumption (MJ, ton, %)
• Fossil Fuel Consumption (MJ, ton)
• Life Cycle Energy Consumption (MJ/ton)
• Changes to availability of energy to local community
(watts)
• Changes in energy costs as % of income
• Energy consumption by local suppliers of
products/services (appropriate units)
• Renewable energy used by local suppliers of
products/services (% of total energy used)

References
Page | 47
Source of impact: Waste generation
• Total Waste Generation (ton, ton/ton product)
• Waste Recycled (ton, ton/ton product)*
• Waste Landfilled (ton, ton/ton product)*
• Waste Incinerated (ton, ton/ton product)*
• Spills (kg, number)*
• Total Non-Product Outputs (ton, ton/ton product)
• Changes in usable land due to spillage (ground or
water contamination)
• Quantity of wastes generated by local suppliers of
products/services to entity (metric tons)
• % of waste generated by local suppliers of
products/services to entity that are beneficially
recycled
Source of impact: Greenhouse gas emissions
IFC Performance Standards 3.10 and 3.11
• Total CO2 Equivalent Emissions (kg, kg/ton product)*
• CO2 Equivalent Emissions Reduction (kg, %)
• Greenhouse Gas Emissions Offsets (kg, g/ton
product)
• Changes in local air quality
• Estimated local supplier of products/services GHG
emission volumes (metric tons equivalent CO2/year)
Source of impact: Emissions /non-GHG) and effluents
• Total Air Pollutant Emissions (kg, g/ton product)
• Total Ozone Depleting Substance Emissions (kg,
g/ton product)*
• Particulates and Dust (kg, g/ton product)
• SO2 and NO2 (kg, g/ton product)*
• CO (kg, g/ton product)
• Total Wastewater Effluents (kg, g/ton product)*
• COD and BOD (kg, g/ton product)
• Changes in local air quality.
• Estimated local supplier of products/services air
pollutant and wastewater emission rates (metric tons
air or water pollutant/year)
• Capital and operating expenses by suppliers of local
products/services for air pollution and wastewater
discharge monitoring and control ($/year)
Source of impact: Products services
• Product impact mitigation programs (number of
programs)*
• Products Reclaimed (%)*
• Product Use Emissions (kg, kg/use)
• Packaging minimization programs (number of
programs)
• Packaging Reclaimed (%)
• # of local supplier of products packaging minimization
and reclamation programs
Source of impact: Cultural heritage
IFC Performance Standards 8.1 – 8.11
• Land Area affected - having archaeological
(prehistoric), paleontological, historical, cultural,
artistic and religious values (ha)
• Changes in indigenous population
• Changes in cultural related tourism (e.g., # of tourists;
eco-tourism)
Links to additional indicators on Environmental Management
IFC Performance Standards, www.ifc.org/ifcext/enviro.nsf/Content/PerformanceStandards
ISO 14001 – Environmental Management Standards, www.iso.org/iso/about.htm
WRI, WBCSD, and IUCN, Ecosystem Services Review, March 2008, www.wbcsd.org

References
Page | 48
ASSETS
ASSETS - Infrastructure
In the context of this Framework, this business activity addresses the creation, maintenance and use of
infrastructure that is primarily aimed at meeting business needs and which may or may not be used by the
community. Companies wishing to assess the impacts of infrastructure that they deliver and/or operate as
a profit making venture should use the Products and Services business activity. When developing
indicators to measure the impact of infrastructure, it is important to consider changes in stakeholder
behavior and subsequent effects on quality of life and socio-economic and environmental conditions in the
assessment area. As an example, the creation of a road may impact movement patterns in the
community, travel time to markets, access to hospitals, etc. which could lead to a host of other knock-on
effects both positive and negative, such as SME growth, increased traffic congestion, increased number of
road-accidents as well as social frictions due to increased population movements.
Large infrastructure projects often require clearing land and displacing people. It is important when
developing indicators that companies consider measures to assess the long-term environmental
sustainability and human development effects. Relevant sources of information for this type of assessment
are the Equator Principles and the underlying IFC Performance Standards. Companies should also
consider reviewing the Environmental Management indicators in conjunction with the infrastructure
indicators to ensure the indirect impacts of the creation and use of infrastructure on the environment are
fully captured.
Table A-3 – Example sources of impact and indicators for Infrastructure
Source of impact: Creation of Infrastructure
• Size, cost and duration of investment in
infrastructure (GRI EC8: Economic indicator)
• Quantity of infrastructure constructed (in
appropriate units)
• # and % of population with access to new
infrastructure
• Cost to those accessing infrastructure (e.g., $ per
toll, registration, etc)
• Use of the infrastructure – who uses it, for what
purposes (survey)
• Changes in stakeholder behavior/ access (e.g.,
change in time needed to get to market, access to
public services)
• Changes in economic activities / social relations
(survey)
• Growth of infrastructure services enterprises (#
and type; # of micro-enterprises)
Source of impact: Usage of existing infrastructure by company
• Quantity and frequency of infrastructure (public
vs. private) used by business (in appropriate
units; x per week, month, year – consider
seasonal changes)
• Change in stakeholder behavior/access (e.g.,
change in time needed to get to market)
• Wear and tear of infrastructure (e.g., change in
maintenance costs)
Source of impact: Maintenance of existing infrastructure
• Frequency and amount of investment in
maintaining existing infrastructure (e.g., # of times
per year, $ per unit)
• Quantity of infrastructure improved (in appropriate
units)
• Changes in # and % of population with access to
infrastructure pre/post maintenance
• Changes in stakeholder behavior/ access (e.g.,
change in time needed to get to market)
• Growth of infrastructure services enterprises (#
and type; # of micro-enterprises)
Links to additional indicators on Infrastructure
ISO 14001 – Environmental Management Standards, www.iso.org/iso/about.htm
WRI, WBCSD, and IUCN, Ecosystem Services Review, March 2008, www.wbcsd.org
IFC Performance Standards, www.ifc.org/enviro
The Equator Principles on project finance, July 2006, www.equator-principles.com
GVEP Monitoring and Evaluation Guide for Energy Projects, December 2006, www.gvepinternational.org

International Telecommunications Union, World Telecommunication/ICT Development Report 2006 – Measuring ICT
for Social and Economic Development, www.itu.int/ITU-D/ict/index.html
ITU, Measuring the Information Society ICT Opportunity Index and World Telecommunication/ICT Indicators – 2007,
www.itu.int/ITU-D/ict/index.html
ASSETS - Products Services
The type of product and service provided by the company will greatly affect the specific indicator to be
used when measuring the impacts of products and services. Companies are encouraged to look at
available sector specific indicators (see links to additional indicators below).
Other impacts to consider include the impact on SMEs or other individual producers of similar goods, cost
of maintenance and replacement fees and effects on cultural norms and traditions. For some indicators,
companies should consider getting counterfactual data or establish whether there is a suitable alternative
to the product or service they are providing and if so, how the impacts of their product or service compares
to this alternative.
To get a full picture of the impacts of products and services, companies should consider other business
activities such as jobs created by suppliers and distributors as well as skills gained by consumers as a
result of the company’s sale of product/service.
References
Page | 49
Table A-4 – Example sources of impact and indicators for Products Services
Source of impact: Sale of product/service
• # of purchases of and expenditure on P or S made
per time period by customer (different customer
segments)
• # of purchases of similar or complementary P S
• Affordability for customer (e.g., spending as % of
overall monthly budget, % of overall spending, % of
income)
• Changes in affordability (e.g., price compared to
competitor prices/prices of similar product or service;
price relative to CPI)
Source of impact: Use of product/service
• Purpose of product: Intended use by / benefits to
customer (specific to product or service e.g., reduce
travel time)
• Any adaptations to product to serve specific income
groups (indicator would be specific to product or
service)
• Effective use by / benefits to customer (specific to
product and service)
• Benefits beyond customer (specific to product and
service, e.g., benefits to family)
• Changes in purchase / use of other products
(substitutes, complements, other)
• Changes in habits (based on survey)
Source of impact: Marketing of product/service
• # of product distributors
• Regional coverage of distribution centers (number of
centers per 5km radius, etc)
• Investment in marketing, advertising, etc ($)
• Market share: # of customers/ users (e.g., as % of
population of area)
• Brand perception by customers / wider public (survey)
Source of impact: Creation of waste from product/service use33
• Labels and information on efficient disposal (Y/N) • Environmental and social awareness of product use
(surveys)
• Efficient use and appropriate disposal (e.g., records of
product recycling)

References
Page | 50
Links to additional indicators on Products Services
Accounting for Sustainability, Decision-making model, www.sustainabilityatwork.org.uk
GVEP Monitoring and Evaluation Guide for Energy Projects, www.gvepinternational.org, Dec 2006
International Telecommunications Union, World Telecommunication/ICT Development Report 2006 – Measuring ICT
for Social and Economic Development, www.itu.int/ITU-D/ict/index.html
ITU, Measuring the Information Society ICT Opportunity Index and World Telecommunication/ICT Indicators – 2007,
www.itu.int/ITU-D/ict/index.html
London, T. Improving the lives of the poor? Assessing the impacts of a base-of-the-pyramid perspective. William
Davidson Institute: Working paper, 2007
Ministry of Foreign Affairs Denmark, Transport Indicators,
http://www.danidadevforum.um.dk/en/menu/monitoringandindicators/indicatorsinsectors
Vodafone, Africa: The Impact of mobile phones, The Vodafone Policy Paper Series, March 2005, www.vodafone.com
WBCSD, Doing Business with the Poor: A field guide, November 2005
World Bank, Core indicators for determinants and performance of electricity sector reform in developing countries,
World Bank Policy Research Working Paper 3599,
http://www.wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2005/05/15/000090341_2005051515091
2/Rendered/PDF/wps3599.pdf, May 2005

PEOPLE
PEOPLE - Jobs
When developing indicators to measure a company’s impact through job creation, it is important to
consider the socio-economic conditions at the individual as well as community or country level that may
change as a result of the creation of the jobs. As an example, companies that provide employment to
large numbers of people often trigger migration to the area which can lead to both positive and negative
impacts.
Many companies provide services such as healthcare and HIV/AIDS education to their employees and
their families. The services vary by company and location, thus companies should consider identifying
appropriate indicators to measure the impact of these programs on the health and well-being of
employees and their families.
References
Page | 51
Table A-5 – Example sources of impact and indicators for Jobs
Source of impact: Jobs within company
• Jobs created (e.g., # of full time equivalent jobs
created by the company; % of skilled workers; % of
residents of assessment area / national residents /
recruited abroad)
• Average salary level (including benefits) (e.g., for
unskilled vs. skilled workers; comparison to average
salary levels in area)
• Benefits to full time vs. part time employees (GRI
Labor Practices Performance Indicators: LA3)
• Equal opportunity of employment (e.g., ratio of m/f
employees; employee turnover by age, gender and
region (GRI Labor Practices Performance Indicators:
LA2))
• Induced employment (e.g., estimated # of jobs
generated through employee spending (both direct
and indirect)
• Estimated # of businesses set up due to employee
spending
• indirect jobs created as a result of economic linkages
between company and local businesses
• Influence on status of women and male/ female roles
(surveys and statistics on female employment in area,
etc.)
• Price fluctuations (e.g., changes in commodity and
housing prices in area)
• Quality of life for employees (surveys on spending and
salary per no of dependents)
• Number of people who have migrated into area for job
(distinguish jobs at company and jobs related to other
opportunities related / unrelated to company’s
presence)
Source of impact: Working conditions
• Occupational health and safety training provided (# of
people, $, types of trainings)
• Employee access to clean water, energy and
sanitation (Y/N and quantity in appropriate units)
• Prevalence of occupational illnesses (e.g., work days
lost)
• Perception of health and well-being by employees
(e.g., surveys)
Source of impact: Expenditure on jobs in supply and distribution chain
• Purchases of goods and services from suppliers
(e.g., $ spent; # of suppliers, local vs. other)34
• Sales of goods and services through distributors ($ of
sales, # of distributors, local vs. other)
• Jobs generated in supply and distribution chain (e.g.,
# of full time equivalent; % skilled; % employees who
are residents of assessment area / national residents /
recruited abroad; diversity of employees)
• Induced employment (e.g., jobs generated due to
suppliers’ employee spending)
• Average salary level of supplier / distributor
employees (including benefits) (e.g., for unskilled vs.
skilled workers; changes in average salaries of
suppliers’ employees due to new contracts)
Links to additional indicators on Jobs
ICMM Resource Endowment Toolkit, www.icmm.com
ILO Key Indicators of the Labor Market, KILM (5th edition), www.ilo.org/public/english/employment/strat/kilm/
ILO Code of Practice on HIV/AIDS in the workplace,
www.ilo.org/public/english/region/afpro/harare/areas/protection/hivaids.htm

ILO Guidelines on OSH Management Systems (ILO-OSH 2001),
www.ilo.org/public/english/protection/safework/managmnt/download/promo.pdf
UNAIDS, The Business Response to HIV/AIDS; Impacts and lessons learned, data.unaids.org/Publications/IRC-pub05/
References
Page | 52
JC445-BusinessResp_en.pdf
SA 8000, www.sa-intl.org
PEOPLE - Skills Training
Qualitative indicators are particularly important to understanding the impacts of skills and training
programs due to the fact that they are subject to the perception of skills gained by stakeholders. In most
cases, impacts cannot be a one-off measurement and will therefore need to be tracked over time to
assess the full benefit (e.g., career progression over time). It is also important to differentiate between the
types of skills being gained by employees and whether the skills are transferable to family members or
those beyond the individual.
Skills and training programs can play a critical role in providing economic opportunities for previously
disadvantaged people. As a result, it is important to assess changes in the demographic make-up (e.g.,
race, age, gender, etc) of program participants and impacts this may have on social equality in the area of
assessment.
Table A-6 – Example sources of impact and indicators for Skills Training
Source of impact: On and off the job training
• Trainings offered (e.g., type of trainings; # of training
days per employee; # of trainings to suppliers)
• Investment in training (e.g., $ invested in training
provided by the company that is not borne by the
individuals, community or local government; training
budget per employee)
• # and % of “skilled” positions for which the company
will hire totally unskilled candidates and train them
• Support to training institutions (e.g., $ paid to local
educational and training institutions for training)
• Training program participants (e.g., # of jobs
providing training/skill development that are filled by
local candidates)
• Performance against gender or race equity (targets
established)
• Upward mobility (e.g., # of internal promotions that
take place a year; retention rate of trained employees;
value of promotional increases awarded)
• # of employees with completed development plans
• Quality of skills and training programs (e.g., survey
feedback from recipients; performance evaluations)
• # of employees that left company and took positions
in other companies / started their own business
Source of impact: Educational Assistance
• Investment in education assistance (e.g., # of
educational assistance grants awarded; $
educational grants provided)
• Educational assistance recipients (e.g., # of
applications for educational grants; % local)
• Quality of educational assistance – towards meeting
employment goals (e.g., surveys of grant recipients)
• Employment trends (e.g., changes in % of local hiring;
# recipients employed elsewhere in the local
economy; # recipients who have started their own
businesses and employ community members)
Source of impact: Community capacity development activities
• Investment in community capacity development (e.g.,
$ invested; per capacity development activity)
• # of participants in activities
• Quality of activities (e.g., surveys of participants)
Links to additional indicators on Skills Training
Anglo American, Socio-economic Assessment Toolbox, www.wbcsd.org/web/dev/cases.htm

FINANCIAL FLOWS
FINANCIAL FLOWS - Procurement
The size of the impacts of a company’s procurement practices on the local economy (however defined)
will depend on the amount of business that stays with local suppliers at each step of the supply chain as
well as the size of the procurement budget relative to the local economy. Suppliers whose business is
largely dependent on the company may face significant risks if the company goes through a slump, delays
payment, or decides to curtail operations locally.
Changes in procurement patterns over the course of the business life cycle can significantly change the
impacts on communities. For example, it may be misleading to take procurement patterns during the
construction phase of a project as representative of patterns over the life of the operation. While this
period may see a large amount of expenditure on local goods and services, it may be followed by a period
during which total local expenditure falls overall.
References
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Table A-7 – Example sources of impact and indicators for Procurement
Source of impact: Expenditure in local economy
• Purchase of local goods and services (e.g., $ spent
on goods and services in local economy; % of total
procurement budget; per project, good/service or
business unit)
• GRI Economic Performance Indicators (e.g., EC6:
Market Presence)
• Company’s procurement spending compared to
overall procurement in area (in %); % of suppliers’
sales with company
• Procurement of suppliers from sub-suppliers
(procurement budget of suppliers)
• Impact on access to credit by supplier (change in
access to credit)
Source of impact: Technology cooperation and support
• Investment in tech training (e.g., $ invested in
technology training, support and provision of physical
assets)
• Supplier productivity (e.g., suppliers’ total sales;
procurement budget of suppliers)
• Diversification of contracts (e.g., change in customer
base or demands of suppliers)
Source of impact: Support to improve compliance with standards
• Investment in supporting supplier compliance (e.g., $
invested in helping suppliers meet product quality
standards or local/national laws (e.g., human rights,
environment, etc.)
• # of local companies that implemented changes to
their systems as a result of training/support
• Change in suppliers’ compliance with standards (e.g.,
changes in # fines/sanctions for non-compliance)
• Diversification of contracts (e.g., change in customer
base or demands of suppliers, changes in access to
markets with specific quality standards)
Links to additional indicators on Procurement
The IFC SME Linkages program has come up with performance indicators specially designed to capture
benefits accruing to local suppliers. Besides Financial Flows, the indicators also touch on the dimensions
of Jobs, and Skills and Training. See www.ifc.org/ifcext/sme.nsf/Content/Linking_SMEs_to_Investments

FINANCIAL FLOWS - Taxes
Identifying indicators to measure the indirect impacts arising from a company’s payment of taxes relies on
information about government redistribution of taxes. As a result, it may be difficult to collect accurate
information about the impact of taxes on socio-economic conditions in the area of assessment.
References
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Table A-8 – Example sources of impact and indicators for Taxes
Source of impact: Taxes borne and collected
• Taxes borne and collected as % of turnover
• Employment taxes borne and collected per employee
• Total tax rate
• Employee taxes
• Taxes borne and collected as % of government
receipts
• Government redistribution (e.g., government receipts
as % of government spending)
• Taxes paid by suppliers
Source of impact: Sector specific taxes borne
• Royalties (Extractive industries)
• Production sharing agreements (Oil and Gas) - % of
what is extracted is owned by the state – i.e. making
explicit what state gets out of the deal in tax and PSA
• Taxes borne and collected as % of government
receipts of sector specific taxes
• Government redistribution (e.g., government receipts
of sector specific as % of government spending
(possibly on sector specific issues)
Source of impact: Tax compliance
• Administrative costs of compliance to tax
requirements (e.g., $ spent on tax procedures)
• Change in tax requirements or procedures
Links to additional indicators on Taxes
PricewaterhouseCoopers, Total Tax Contribution, www.pwc.com

Appendix 3: Scorecards for Governance Sustainability
Scorecard for direct impacts from Corporate Governance
Due to the compliance nature of Corporate Governance, a “qualitative” scoring system based on five
possible score assignments (-2, -1, 0, +1, or +2) for each Corporate Governance source of impact has
been prepared. It can be used to summarize the company’s compliance and adherence to standards
through an analysis of the direct level impacts. Standards indicated below may be IFC performance
standards (if applicable), relevant local/national standards, or International Organization for
Standardization (ISO) management system standards.
Each score considers the combination of (1) the corporate governance indicators, (2) the local/national or
international standards accepted (e.g., ratified) by the respective government or industry, and (3) the
actual or foreseen corporate governance performance/impacts after implementation of the system by the
business, as follows:
+2 Corporate governance controls/procedures/programs in relation to indicator [x] are far
above standards and respective practices cause or could cause highly beneficial impacts
in the geographic area
+1 Corporate governance controls/procedures/programs in relation to indicator [x] are slightly
above standards and respective practices cause or could cause slightly beneficial impacts
0 Corporate governance controls/procedures/programs in relation to indicator [x] are
References
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average and impacts are negligible
-1 Corporate governance controls/procedures/programs in relation to indicator [x] are slightly
below standards and respective practices cause or could cause minor detrimental impacts
-2 Corporate governance controls/procedures/programs in relation to indicator [x] are far
below standards and respective practices cause or could cause highly detrimental impacts
Scoring of each governance impact category is a subjective assessment. The goal is to achieve a high
weighted average corporate governance (WACG) score. This Framework recommends that the corporate
governance scorecard score ranges be interpreted and acted upon as follows:
WACG Score Interpretation/Recommended Action
+0.25 to +2.0 Positive corporate governance performance – improvements on some indicators can be
considered, but may not be necessary
-0.24 to +0.24 Neutral impact of corporate governance performance – consider making improvements to
some corporate governance indicators
-2.0 to -0.25 Serious corporate governance gaps exist – actively work to improve the corporate
governance impact of business operations and ensure operations comply with all relevant
standards
Thus, a maximum possible WACG score of 2 demonstrates that the highest possible corporate
governance principles are effectively in place. Major changes to the corporate governance systems should
be considered if the lowest score of -2 is determined for any specific business governance category. Note
that separate scorecards could be developed for supplier’s corporate governance.

Scorecard for direct impacts from Environmental Management
Due to the prevalence of local/national and international standards on Environmental Management, a
“qualitative” scoring system based on five possible score assignments (-2, -1, 0, +1, or +2) for each
Environmental Management impact category has been prepared. It can be used to summarize the
company’s compliance and adherence to local and/or national and/or international and/or industry
standards through an analysis of the direct level impacts. The following scorecard could be used for
existing business or a proposed new project.
Each score considers the combination of (1) the environmental management direct indicators, (2) the
local/national or international standards accepted (e.g., ratified) by the respective government or industry,
and (3) the actual or foreseen environmental management performance/impacts after implementation of
the system by the business, as follows:
+2 Environmental management controls/procedures/practices in relation to indicator [x] are
far above IFC or other relevant standards and cause or could cause highly beneficial
impacts in the geographic area
+1 Environmental management controls/procedures/practices in relation to indicator [x] are
slightly above IFC standards or other relevant standards and cause or could cause slightly
beneficial impacts in the geographic area
0 Environmental management controls/procedures/practices in relation to indicator [x] are at
References
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industry average and meet IFC standards; impacts are negligible
-1 Environmental management controls/procedures/practices in relation to indicator [x] are
slightly below IFC or other relevant standards and cause or could cause minor detrimental
-2 Environmental management controls/procedures/practices in relation to indicator [x] are
far below IFC or other relevant standards and cause or could cause highly detrimental
The evaluator will assign weightings to each impact category based on the importance and/or scale of the
activity within the category (i.e., indicators). Undeveloped area baseline means the environmental
conditions in the local community/region/country before the business enterprise began its operations or
before the project was developed. Scoring of each environmental management impact category is a
subjective assessment. The goal is to minimize the average weighted environmental management impact
score (AWEM) score. This Framework recommends that the environmental management scorecard score
ranges be interpreted and acted upon as follows:
AWEM Score Interpretation/Recommended Action
+0.25 to +2.0 Positive environmental management performance – improvements on some indicators
can be considered, but may not be necessary
-0.24 to +0.24 Neutral impact of environmental management performance – consider making
improvements to some indicators
-2.0 to -0.25 Serious environmental management gaps exist – actively work to improve the
environmental management impact of business operations and ensure operation complies
with all relevant standards
Companies should also consider performing the same assessment for their suppliers.

References
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Appendix 4: Additional development context for Step 3
Additional guidelines on stakeholder engagement
AccountAbility, AA1000 Assurance Standard, March 2003,www.accountability21.net
Bentley College, “Toward Effective Stakeholder Dialogue”, Business and Society Review, 2003
The Centre for Innovation in Corporate Responsibility, Engaging stakeholders and business-NGOs
partnerships in development countries: Maximizing an increasingly important source of value, Nov 1999
IFC, Stakeholder Engagement: A good practice handbook for companies doing business in emerging
markets, May 2007,
www.ifc.org/ifcext/enviro.nsf/Content/Publications_GoodPractice_StakeholderEngagement
WBCSD stakeholder toolkit, www.wbcsd.org/DocRoot/xL8r3TMK4LJYU5OU8ISj/stakeholder-toolkit.pdf
WBCSD guide on stakeholder dialogues,
www.wbcsd.org/DocRoot/sY0gbwlH9OPo3doLXocI/stakeholder.pdf
Example development issues
The following tables describe some example development issues with references and key indicators used
by the United Nations or the World Bank to assess progress on these development issues. Although they
are unlikely to correspond directly to the specific development priorities identified by stakeholders, there is
likely to be some overlap and thus the information can be used to develop the hypothesis.
Additional data sources:
UNDP Human Development Report, published annually with different themes and indicators,
www.undp.org
WBCSD, Doing Business with the World, 2007. The publication aims to offer a business perspective on
some of the key challenges and opportunities inherent in doing business in ways that bring sustainable
development to all. See www.wbcsd.org
Capacity building
Description
The World Bank defines capacity building as a “coordinated process of deliberate interventions by
insiders and/or outsiders of a given society leading to (i) skill upgrading, both general and specific, (ii)
procedural improvements, and (iii) organizational strengthening. Capacity building refers to investment in
people, institutions, and practices that will, together, enable countries in the region to achieve their
development objective. Capacity is effectively built when these activities are sustained and enhanced with
decreasing levels of donor-aid dependence accompanied by increasing levels of societal goal
achievement.”
Ways business can contribute to capacity building
Through both formalized skills and training programs and informal knowledge and technology exchange
with employees, suppliers and communities, companies support capacity building in societies. When skills
and training programs designed to meet business needs are aligned with community needs the business
is likely to make the greatest contribution to development.
MDG and related international goals
MDG 1: End poverty and hunger. Capacity building can play a critical role in helping people find
employment and rise out of poverty. Capacity building cuts across a number of different MDGs,
depending on the type of capacity building activity (e.g., environmental sustainability, education, health,
etc.)
MDG 8: Build a global partnership for development, target 16: In cooperation with developing countries,
develop and implement strategies for decent and productive work for youth
References World Bank Capacity Development Resource Center,
www.worldbank.org/capacity

References
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Economic growth
Description
Economic growth is most widely understood as the increase in the value of goods and services in an
economy. It is usually measured as the percentage increase in gross domestic product (GDP), which is
the sum of gross value added by all resident producers in the economy plus any product taxes (less
subsidies) not included in the value of the products.
Ways business can contribute to economic growth
As the primary producers and distributors of goods and providers of services, business is the key driver of
economic growth. Companies can measure their respective value added to an economy. This is defined
as sales less the cost of bought-in goods and services. A precise figure for value added defined in this
way can, however, be calculated by adding together four quantities that are given in company accounts:
operating profit, employee costs, depreciation and amortization.
MDG 1: End poverty and hunger. Greater productivity and growth is one of the factors contribution to
overall income generation and economic opportunities for individual and communities
UN Human Development
Indicators (economic
performance)
• GDP (PPP)
• GDP per capita
• Annual growth rate
• Average annual change in consumer price index
References • Exploring the Links between International Business and Poverty
Reduction: A Case Study of Unilever in Indonesia, Dec 2005,
www.wbcsd.org
• Measuring Unilever’s economic footprint: The case of South Africa, Jan
2008, www.wbcsd.org
• UNCTAD, Guidance on Corporate Responsibility Indicators in Annual
Reports (TD/B/COM.2/ISAR/41), 2007, www.unctad.org/isar
Education
Description
Education is central to development as one of the most powerful instruments for reducing poverty and
inequality and laying a foundation for sustained economic growth. It empowers people and strengthens
nations. It is a powerful “equalizer” and benefits personal health. For individuals and nations, it is key to
creating, applying, and spreading knowledge—and thus to the development of dynamic and globally
competitive economies.
Ways business can contribute to education
Companies normally focus upon secondary education and technical training to ensure that the local pool
of labor has the basic set of skills needed for employment. However, companies may also invest in
primary education through their social investment activities with the aim of building a foundation of
educated and skilled youth and supporting economic opportunities in communities.
MDG 2 states that all children will complete primary schooling
MDG 3 on promoting gender equality and empower of women sets in its target 4/10 a ratio of literate
women to men between 15-24 years of age
Relevant international
declarations and
conventions (articles)
Convention on Technical and Vocational Education, 1989
portal.unesco.org/en/ev.php-
URL_ID=13059URL_DO=DO_TOPICURL_SECTION=201.html
Convention against Discrimination in Education, 1960
portal.unesco.org/en/ev.php-
URL_ID=12949URL_DO=DO_TOPICURL_SECTION=201.html
Convention 143 on Human Resources Development Convention, 1975
www.ilo.org/ilolex/english/convdisp2.htm
Convention on the Rights of the Child, 1989
www.ohchr.org/english/law/crc.htm
Indicators (commitment to
education, literacy and
• Public expenditure on education
• Public expenditure on education as % of GDP and as % of total
government expenditure

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enrolment, gender
inequality in education)
• Public expenditure on education by level (primary, secondary and
tertiary)
• Adult and youth literacy rates (male vs. female)
• Net primary and secondary enrolment ratios (male vs. female)
• Children reaching grade 5 as % of grade 1 students
• Tertiary students in science, math and engineering
References • UNESCO, Education for All Global Monitoring Report
Enterprise development
Description
Growth of enterprises, particularly small- and medium-sized enterprises (SMEs), is a critical contributor to
broad-based development. Locally owned and managed enterprises provide employment opportunities to
local citizens. The movement of more enterprises into the formal sector means increased contribution to
taxes and value added to the overall economy, in addition to greater compliance with regulation such as
labor conditions. This also improves the ability of SMEs to access technical and financial support and
formal supply chains.
Ways business can contribute to enterprise development
Large corporations can source more of their supplies locally from the countries where they operate and
establish supply chains from developing countries. They can help SMEs become more viable business
partners by providing training in basic skills such as management, bookkeeping, business planning,
marketing, distribution and quality control. They can assist through technology transfers, direct investment
in infrastructure, and the sharing of knowledge, helping make SMEs more competitive and facilitating
access to credit.
MDG 1: Enterprise growth is important to helping people lift themselves out of poverty
MDG 3: on promoting gender equality and empower women states in target 4/11 to raise the share of
women in wage employment in the non-agricultural sector
World Bank Doing
Business Indicators,
2007
• Starting a business: procedures, time, cost and minimum capital
• Dealing with licenses: procedures, time and cost
• Employing workers: difficulty of hiring, rigidity of hours, difficulty of firing,
nonwage labor cost, firing cost
• Registering property: procedures, time, and cost
• Getting credit: strength of legal rights, depth of credit information, public
registry coverage, and private bureau coverage
• Protecting investors: extent of disclosure, extent of director liability, ease
of shareholder suits, and strength of investor protection
• Paying taxes: payments, time, and total tax rate
• Trading across borders: documents to export, time to export, cost to
export, documents to import, time to import, and cost to import
• Enforcing contracts: procedures, time and cost
• Closing a business: time, cost and recovery rate
References • IFC SME Linkages Program,
www.ifc.org/ifcext/sme.nsf/Content/Linking_SMEs_to_Investments
• World Bank, Doing Business Report, www.doingbusiness.org
• WBCSD, Promoting Small and Medium Enterprises for Sustainable
Development Issue Brief, 2007

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Environmental sustainability
Description
Environmental sustainability is defined as the long-term maintenance of ecosystem components and
functions for future generations. For society, this involves meeting the needs of the present without
compromising the ability of future generations to meet their needs. It encompasses, for example, keeping
population densities within the carrying capacity of a region, facilitating the renewal of renewable
resources, conserving and establishing priorities for the use of non-renewable resources, and keeping
environmental impact below the level required to allow affected systems to recover and continue to
evolve.
Ways business can contribute to environmental sustainability
Every company will touch on some aspect of environmental sustainability. The specific impact that a
company has and how it can promote environmental sustainability depends greatly upon the industry in
question. To the extent that a company’s environmental management system reflects global best
practice, the company can work with local, regional, and national government structures to build capacity.
For the mining, energy, and forestry industries, ensuring that appropriate remediation occurs after
resource extraction is essential to preventing or reversing the loss of environmental resources. For other
companies, the promotion of efficiency (in energy and resource usage) and recycling can also have
important impacts. A number of industries use significant amounts of water and their social license to
operate is therefore in part dependent upon the continued availability of safe drinking water to others as
well as sufficient water for activities such as farming. A review of the full life cycle of a product line or
service reveals many areas where the environment is affected. Production, distribution and packaging are
particular areas of concern for companies looking to reduce their environmental footprint.
MDG 7: Protect the environment by ensuring principles of sustainable development are integrated into
country policies/programs and reduce the loss of environmental resources
Relevant international
declarations, treaties and
conventions (articles)
• Convention on Biological Diversity
• Kyoto Protocol
• Framework Convention on Climate Change
• Cartagena Protocol on Biosafety
Indicators (energy and the
environment)
• Traditional fuel consumption as % of total energy requirements
• Electricity consumption per capita
• GDP per unit of energy use
• Carbon dioxide emissions per capita and share of world total
• Ratification of environmental treaties
References • WRI, WBCSD and IUCN, Ecosystem Services Review
• WBCSD and WRI, The Greenhouse Gas Protocol
• WBCSD, Policy Directions to 2050
• WBCSD, Pathways to 2050: Energy and Climate Change
• WBCSD, Facts and Trends: Energy and Climate Change
Governance
Description
Governance refers to the use of institutions, structures of authority, and collaboration to allocate
resources and coordinate/control activity in a society or economy. Good governance is associated with
citizen participation, and overall improved accountability of public officials to citizens.
Ways business can contribute to governance
Multinational companies can encourage (or undermine) good governance efforts. Engagement in anti-corruption
initiatives allows companies to lead by example and to build local capacity and commitment.
There are also opportunities for companies to leverage the commitment of international donor agencies to
improve capacity building and economic growth in countries. Business’ role in public-private partnerships
for such things as building public infrastructure and other undertakings can help it play a critical role in
establishing more stable, inclusive and predictable regulatory frameworks.
MDG 8: Build a global partnership for development. Many of the issues noted in MDG 8 are essentially for
governments to address. Nevertheless, there are some areas in which companies can engage in a
partnership with government.

References
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UN Human
Development Indicators
(Flows of aid, private
capital and debt, priorities
in public spending)
WBI Governance
Indicators
• Official development assistance (ODA)
• Net foreign direct investment (FDI) inflows
• Other private flows
• Total debt service as % of GDP and % of exports of goods, services and
net income from abroad
• Public expenditure on education, health, and military
• Voice and accountability
• Political stability and absence of violence
• Government effectiveness
• Regulatory quality
• Rule of law
• Control of corruption
References • Governance Matters 2007: World Governance Indicators, World Bank
Institute, www.govindicators.org
Human rights
Description
The Universal Declaration of Human Rights signed in 1948 and the two subsequent covenants on Civil
and Political Rights and Economic, Social and Cultural Rights of 1966 comprise the International Bill of
Human Rights and include the most widely-used definition of human rights. In addition to the International
Bill of Rights and the core human rights treaties, there are many other universal instruments relating to
human rights. The legal status of these instruments varies: declarations, principles, guidelines, standard
rules and recommendations have no binding legal effect, but such instruments have an undeniable moral
force and provide practical guidance to States in their conduct; covenants, statutes, protocols and
conventions are legally binding for those States that ratify or accede to them. The core purpose of these
instruments is defined by law in most countries as well as in a host of industry and company codes of
conduct. The challenge is practical implementation, particularly in countries where the application of
human rights is low.
Discrimination, based on racial, gender, disability, age, or ethnic prejudices, serves to keep people in a
cycle of poverty and limit access to basic needs is a particularly important issue for business. Particular
rights of workers are defined through a number of conventions, recommendations and declarations
authored and monitored by the International Labour Organization.
Ways business can contribute to human rights
Although governments bear the primary responsibility for protecting and fulfilling the human rights of their
citizens, business should conduct their activities in a way that respect and promote human rights.
Companies should respect human rights within their operations and supply chain, as well as consider the
implications of operating in areas where the human rights record of the host government is weak. If
companies enter into relationships with organizations which have a record of human rights abuses, or if
they benefit from the abuse of others’ human rights – even if unintentionally or unknowingly – they could
be accused of complicity. Setting an example of good practice may influence other organizations to adopt
similar practices.
All the goals set out in the MDGs address the respect and promotion of human rights.
Relevant international principles
Ten Principles of the Global Compact
www.globalcompact.org
The Voluntary Principles on Security and Human Rights
www.voluntaryprinciples.org
Relevant international declarations and conventions (articles)
• The Universal Declaration of Human Rights (UDHR) 1948
• The International Covenant on Economic, Social and Cultural Rights (ICESCR), 1966
• The International Covenant on Civil and Political Rights (ICCPR), 1966
• International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), 1965
• Convention on the Elimination of All Forms of Discrimination against Women (CEDAW). 1966
• Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT),
1984

• Convention on the Rights of the Child (CRC), 1989
• International Convention on the Protection of the Rights of All Migrant Workers and Members of Their
References
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Families (ICRMW), 1990, www.ohchr.org
Labor standards and
declarations
ILO’s Declaration on Fundamental Principles and Rights at Work,
www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE
ILO’s Tripartite Declaration of Principles Concerning Multinational
Enterprises and Social Policy,
www.ilolorg/public/english/employment/multi/overview.htm
Convention 143 on Human Resources Development Convention, 1975
www.ilo.org/ilolex/english/convdisp2.htm
Convention 169 on Indigenous and Tribal Peoples Convention,
www.ilo.org/public/english/standards/norm/egalite/itpp/convention/manual.pdf
Convention 183 on Maternity Protection Convention,
www.ilo.org/ilolex/cgi-lex/convde.pl?C183
References OECD Guidelines for Multinational Enterprises, www.oecd.org
Human Rights Compliance Assessment Tool (HRCA)
www.humanrightsbusiness.org
Guide to Human Right Impact Assessment (IBLF)
www.iblf.org/resources/general.jsp?id=123946
A guide for integrating human rights into business management (BLIHR)
www.blihr.org
Poverty alleviation
Description
Poverty is multidimensional. Economic deprivation – lack of income – is a standard feature of most
definitions of poverty, but does not in itself take account of the myriad social, cultural and political aspects
of the phenomenon. Poverty erodes or nullifies economic and social rights such as the right to health,
adequate housing, food and safe water, and the right to education. The same is true of civil and political
rights, such as the right to a fair trial, political participation and security of the person. A human rights
definition and understanding leads to more adequate responses to the many facets of poverty, responses
that do not trample on rights in the pursuit of growth and development. Importantly, it looks not just at
resources but also at the capabilities, choices, security and power needed for the enjoyment of an
adequate standard of living and other fundamental civil, cultural, economic, political and social rights.
Ways business can contribute to poverty alleviation
Companies can reduce poverty through both the direct and indirect employment that they generate. In
many countries, the income generated by one formal job supports a large extended family, thus helping
pull many people out of poverty. Moreover, the income that then enters into the community from formal
employment is subject to an important multiplier effect. Additionally, companies can stimulate economic
activity and help reduce poverty through procurement policy. Business can also support small-scale
producers through technology transfer and capacity building as well as developing a local supplier base.
In a general sense, the wealth created through a company’s activities can improve the community’s ability
to meet basic needs. Company taxes paid to governments can also help provide access to social
services for the poorest communities if the right frameworks are in place.
All the goals set out in the MDGs address the challenge of poverty alleviation. MDG 1 focuses explicitly
on eradicating extreme poverty and hunger with the specific target of halving the proportion of people
living below one dollar a day. However, targeting education for all (MDG 2), equality for women (MDG 3),
make motherhood and children’s life safe (MDG 4 to 5), stop AIDS/HIV and other diseases (MDG 6),
protection of the environment (MDG 8) and building a global partnership for development all aim to set a
global agenda to end poverty.
Relevant international declarations and conventions (articles)
• The Universal Declaration of Human Rights (UDHR) 1948
• The International Covenant on Economic, Social and Cultural Rights (ICESCR), 1966
• The International Covenant on Civil and Political Rights (ICCPR), 1966
• International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), 1965
• Convention on the Elimination of All Forms of Discrimination against Women (CEDAW). 1966
• Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT),

References
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1984
• Convention on the Rights of the Child (CRC), 1989
• International Convention on the Protection of the Rights of All Migrant Workers and Members of Their
Families (ICRMW), 1990, www.ohchr.org
UN Human
(Human and income
poverty, gender related
development)
• Probability at birth of not surviving to age 40
• Adult illiteracy rate (male vs. female)
• Population without sustainable access to an improved water source
• Children under weight for age
• Population living under $1 and $2 a day
• National poverty line
References Oxfam International, www.oxfam.org
Public health
Definition
The World Health Organization defines health as “a state of complete physical, mental and social well-being
and not merely the absence of health or infirmity.” Public health refers to the health of a community
as a whole. HIV/AIDS is of particular concern in many developing countries.
Ways business can contribute to public health
Business can have a positive impact on health in a number of ways beyond increasing the purchasing
power of their employees. For companies that are involved in the provision of medical care (either
through their products and services or through hospitals that they run on site), there can be a direct link.
In the cases where companies are selling products and services that prevent disease, promote healthy
lifestyles and treat illnesses, business can have positive long-term health effects. Companies can
negatively influence population health through products and services that are detrimental to health such
as cigarettes or alcohol. If companies do not manage their environmental risks in a responsible manner,
do not ensure healthy work conditions or support access to healthcare, there can be serious ramifications
for the health of the local community. In the case where the business is integrated into the community, the
maintenance of hospitals and clinics on their sites can be key to ensuring access to quality medical care
for the local population. Though the primary purpose of these facilities may be to treat employees, the
presence of qualified medical personnel in the area will help address other health challenges and improve
health education. In some instances, companies operate hospitals that also explicitly serve the local
community.
MDG 4, 5 and 6 all concern improving the health of people living in developing countries. More
specifically, it sets targets for reducing child mortality, improving maternal health and combating
HIV/AIDS, malaria and other diseases. Within MDG 8 on developing a global partnership for
development, target 16 states that “in cooperation with pharmaceutical companies provide access to
affordable essential drugs in developing countries”.
Relevant international principles
The Constitution of the World Health Organization highlights the following principles:
• The enjoyment of the highest attainable standard of health is one of the fundamental rights of every
human being without distinction of race, religion, political belief, economic or social condition.
• The health of all peoples is fundamental to the attainment of peace and security and is dependent
upon the fullest cooperation of individuals and States.
• The achievement of any State in the promotion and protection of health is of value to all.
• Unequal development in different countries in the promotion of health and control of disease,
especially communicable disease, is a common danger.
• Healthy development of the child is of basic importance; the ability to live harmoniously in a changing
environment is essential to such development.
• The extension to all peoples of the benefits of medical, psychological and related knowledge is
essential to the fullest attainment of health.
• Informed opinion and active cooperation on the part of the public are of the utmost importance in the
improvement of the health of the people.
• Governments have a responsibility for the health of their peoples, which can be fulfilled only by the
provision of adequate health and social measures.
www.searo.who.int/LinkFiles/About_SEARO_const.pdf

References
Page | 64
UN Human
(commitment to health,
water, sanitation and
nutritional status, leading
global health crises and
risks, survival)
• Health expenditure: public, private and per capita
• One-year-olds fully immunized: TB and measles
• Children with diarrhea receiving oral rehydration and continued feeding
• Contraceptive prevalence rate
• Births attended by skilled health personnel
• Physicians per 100,000 people
• Population with sustainable access to improved sanitation and improved
water source
• Population undernourished
• Children under weight for age
• Children under height for age
• Infants with low birth weight
• Infant mortality rate
• Under 5 mortality rate
• Life expectancy at birth
• Maternal mortality rate
• Probability at birth of surviving to age 65
• HIV prevalence, condom use at last high risk sex
• Malaria cases
• Children under 5 with insecticide treated bednets and fever treated with
anti-malarial drugs
• TB cases
• Prevalence of smoking
References World Health Organization, www.who.int
UN AIDS, www.unaids.org
Social stability
Description
Social stability is a reflection of the levels of peace, security, safety and trust within society. All manner of
economic (e.g., income disparities) and social distortions (e.g., migration, discrimination on racial or
religious grounds) can influence the level of social stability.
Ways business can contribute to social stability
Companies have the capacity to reach large numbers of people through the products and services they
provide, the jobs they create, the investment choices they make and the ethical practices they enforce.
This geographic reach allows companies to influence populations in both positive and negative ways. In
countries with large social divides, political instability and/or rampant violent crime or history of conflict,
company activities can play a key role in stabilizing or destabilizing a local community.
UN Human
(Demographic trends,
refugees and armaments,
victims of crime)
• Total population
• Annual population growth rate
• Urban population
• Population under age 15
• Population ages 65 and above
• Total fertility rate
• Internally displaced people
• Refugees
• Conventional arms transfers (imports and exports)
• Total armed forces
• Population victimized by crime (total crime, property crime, robbery,
sexual assault, assault, bribery)
References International Committee of the Red Cross, www.icrc.org
UN High Commissioner for Refugee, www.unhcr.org

References
Page | 65
Appendix 5: Millennium Development Goals
Millennium Development Goals Report, 2007, www.un.org/millenniumgoals/
This report is based on a master set of data compiled by an Inter-Agency and Expert group on MDG
Indicators led by the UN Secretariat, in response to the wishes of the General Assembly for periodic
assessment of progress towards the MDGs.
Goals and Targets Indicators for monitoring progress
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015, the
proportion of people whose income is less than
one dollar a day
1.1 Proportion of population below $1 (PPP) per day
1.2 Poverty gap ratio
1.3 Share of poorest quintile in national consumption
Target 1.B: Achieve full and productive
employment and decent work for all, including
women and young people
1.4 Growth rate of GDP per person employed
1.5 Employment-to-population ratio
1.6 Proportion of employed people living below $1 (PPP) per
day
1.7 Proportion of own-account and contributing family workers
in total employment
Target 1.C: Halve, between 1990 and 2015, the
proportion of
people who suffer from hunger
1.8 Prevalence of underweight children under-5 yrs old
1.9 Proportion of population below minimum level of dietary
energy consumption
Goal 2: Achieve universal primary education
Target 2.A: Ensure that, by 2015, children
everywhere, boys and girls alike, will be able to
complete a full course of primary schooling
2.1 Net enrolment ratio in primary education
2.2 Proportion of pupils starting grade 1 who reach last grade of
primary
2.3 Literacy rate of 15-24 year-olds, women and men
Goal 3: Promote gender equality and empower women
Target 3.A: Eliminate gender disparity in primary
and secondary education, preferably by 2005, and
in all levels of education no later than 2015
3.1 Ratios of g/b in primary, secondary, tertiary education
3.2 Share of women in wage employment in the non-agricultural
sector
3.3 Proportion of seats held by women in national parliament
Goal 4: Reduce child mortality
Target 4.A: Reduce by two-thirds, between 1990
and 2015, the under-five mortality rate
4.1 Under-five mortality rate
4.2 Infant mortality rate
4.3 Proportion of 1 yr-old children immunized against measles
Goal 5: Improve maternal health
Target 5.A: Reduce by three quarters, between
1990 and 2015, the maternal mortality ratio
5.1 Maternal mortality ratio
5.2 Proportion of births attended by skilled health personnel
Target 5.B: Achieve, by 2015, universal access to
reproductive health
5.3 Contraceptive prevalence rate
5.4 Adolescent birth rate
5.5 Antenatal care coverage (at least one visit and at least four
visits)
5.6 Unmet need for family planning
Goal 6: Combat HIV/AIDS, malaria and other diseases
Target 6.A: Have halted by 2015 and begun to
reverse the spread of HIV/AIDS
6.1 HIV prevalence among population aged 15-24 years
6.2 Condom use at last high-risk sex
6.3 Proportion of population aged 15-24 years with
comprehensive correct knowledge of HIV/AIDS
6.4 Ratio of school attendance of orphans to school attendance
of non-orphans aged 10-14 years
Target 6.B: Achieve, by 2010, universal access to
treatment for HIV/AIDS for all those who need it
6.5 Proportion of population with advanced HIV infection with
access to antiretroviral drugs
Target 6.C: Have halted by 2015 and begun to
reverse the incidence of malaria and other major
diseases
6.6 Incidence and death rates associated with malaria
6.7 Proportion of children under 5 sleeping under insecticide-treated
bednets and proportion of children under 5 with
fever who are treated with appropriate anti-malarial drugs

6.8 Incidence, prevalence and death rates associated with
References
Page | 66
tuberculosis
6.9 Proportion of tuberculosis cases detected and cured under
directly observed treatment short course
Goal 7: Ensure environmental sustainability
Target 7.A: Integrate the principles of sustainable
development into country policies and programs
and reverse the loss of environmental resources
7.1 Proportion of land area covered by forest
7.2 CO2 emissions, total, per capita, per $1 GDP (PPP), and
consumption of ozone-depleting substances
7.3 Proportion of fish stocks within safe biological limits
7.4 Proportion of total water resources used
Target 7.B: Reduce biodiversity loss, achieving,
by 2010, a significant reduction in the rate of loss
7.5 Proportion of terrestrial and marine areas protected
7.6 Proportion of species threatened with extinction
Target 7.C: Halve, by 2015, the proportion of
people without sustainable access to safe drinking
water and basic sanitation
7.7 Proportion of population using an improved drinking water
source
7.8 Proportion of population using an improved sanitation
Target 7.D: By 2020, to have achieved a
significant improvement in the lives of at least 100
million slum dwellers
7.9 Proportion of urban population living in slums
Goal 8: Develop a global partnership for development
Target 8.A: Develop further an open, rule-based,
predictable, non-discriminatory trading and
financial system. Includes a commitment to good
governance, development and poverty reduction –
both nationally and internationally
Target 8.B: Address the special needs of the
least developed countries. Includes: tariff and
quota free access for the least developed
countries' exports; enhanced program of debt
relief for heavily indebted poor countries (HIPC)
and cancellation of official bilateral debt; and more
generous ODA for countries committed to poverty
reduction
Target 8.C: Address the special needs of
landlocked developing countries and small island
developing States (through the Programme of
Action for the Sustainable Development of Small
Island Developing States and the outcome of the
twenty-second special session of the General
Assembly)
Target 8.D: Deal comprehensively with the debt
problems of developing countries through national
and international measures in order to make debt
sustainable in the long term
Some indicators below are monitored separately for the LDCs,
Africa, landlocked, and small island States.
Official development assistance (ODA)
8.1 Net ODA, total and to the least developed countries, as % of
OECD/DAC donors’ gross national income
8.2 Proportion of total bilateral, sector-allocable ODA of
OECD/DAC donors to basic social services (basic
education, primary health care, nutrition, safe water and
sanitation)
8.3 Proportion of bilateral official development assistance of
OECD/DAC donors that is untied
8.4 ODA received in landlocked developing countries as a
proportion of their gross national incomes
8.5 ODA received in small island developing States as a
proportion of their gross national incomes
Market access
8.6 Proportion of total developed country imports (by value and
excluding arms) from developing countries and least
developed countries, admitted free of duty
8.7 Average tariffs imposed by developed countries on
agricultural products and textiles and clothing from
developing countries
8.8 Agricultural support estimate for OECD countries as a
percentage of their gross domestic product
8.9 Proportion of ODA provided to help build trade capacity
Debt sustainability
8.10 Total number of countries that have reached their HIPC
decision points and number that have reached their HIPC
completion points (cumulative)
8.11 Debt relief committed under HIPC and MDRI Initiatives
8.12 Debt service as a percentage of exports of goods and
services
Target 8.E: In cooperation with pharmaceutical
companies, provide access to affordable essential
drugs in developing countries
8.13 Proportion of population with access to affordable essential
drugs on a sustainable basis
Target 8.F: In cooperation with the private sector,
make available the benefits of new technologies,
especially information and communications
8.14 Telephone lines per 100 population
8.15 Cellular subscribers per 100 population
8.16 Internet users per 100 population

References
Page | 67
Appendix 6: UN Global Compact principles and relevant international
declarations and conventions
Human rights
Principle 1 Businesses should support and respect the protection of internationally proclaimed
human rights.
Principle 2 Businesses should make sure that they are not complicit in human rights abuses.
International Bill of Human Rights
• The Universal Declaration of Human Rights (1948)
• International Covenant on Economic, Social and Cultural Rights (1966)
• International Covenant on Civil and Political Rights (1966)
• 2 Optional Protocols on the above conventions
In 1948 the General Assembly of the United Nations adopted the Universal Declaration of Human Rights and called
upon ‘every individual and organ of society’ to play their part in securing the observance of human rights.” It has
been adopted by 148 states but is not legally binding.
www.ohchr.org/english/law/index.htm
Labor standards
Principle 3 Businesses should uphold the freedom of association and the effective recognition of
the right to collective bargaining.
Principle 4 Businesses should uphold the elimination of all forms of forced and compulsory labor
Principle 5 Businesses should uphold the effective abolition of child labor; and
Principle 6 Businesses should uphold the elimination of discrimination in respect of employment
and occupation.
Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977)
The Tripartite Declaration principles are voluntary in nature and aim to encourage social dialogue and support best
practice. The declaration was revised in 2000 to include the Fundamental Principles and Rights at Work, and more
recently in 2006 to update references to other ILO instruments.
www.ilo.org/public/english/employment/multi/download/english.pdf
Declaration on Fundamental Principles and Rights at Work (1998)
The Declaration states that the rights to work are universal, and that they apply to all people in all States -
regardless of the level of economic development. It makes particular reference to groups with special needs,
including unemployed and migrant workers. It commits Member States to respect and promote principles and rights
in four categories building on the eight core labor conventions.
www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE
Environment
Principle 7 Business should support a precautionary approach to environmental challenges.
Principle 8 Business should undertake initiatives to promote greater environmental responsibility
Principle 9 Business should encourage the development and diffusion of environmentally friendly
technologies.
The Rio Declaration on Environment and Development (1972)
The Rio Declaration includes a statement of 27 principles upon which nations agreed to base their actions in
addressing environmental and development issues. The Rio Declaration built on the previous Declaration of the
United Nations Conference on the Human Environment from 1972. The Declaration was the first global
environmental meeting of governments, which stated that long-term economic progress needs to be linked with
environmental protection.
www.unep.org/Documents.Multilingual/Default.asp?DocumentID=78ArticleID=1163
Anti-corruption
Principle 10 Business should work against corruption in all its forms, including extortion and
bribery
The United Nations Convention Against Corruption (2003)
The Convention against Corruption aims to combat corruption through measures on prevention, criminalization,
international cooperation, and asset recovery.
www.unodc.org/unodc/crime_convention_corruption

References
Page | 68
Notes and references
1 The six (6) OECD Principles on Corporate Governance are: I. Ensuring the Basis for an Effective
Corporate Governance Framework; II. The Rights of Shareholders and Key Ownership Functions; III. The
Equitable Treatment of Shareholders; IV. The Role of Stakeholders; V. Disclosure and Transparency; and
VI. The Responsibilities of the Board.
2 OECD Principles of Corporate Governance. www.oecd.org/dataoecd/32/18/31557724.pdf.
3 Amartya Sen. Development as Freedom. Random House. 1999.
4 Infrastructure can include both physical and “soft” infrastructure such as financial and social services
infrastructure
5 WBCSD. The Role of Business in Tomorrow’s Society. 2006.
6 This Framework references jobs created in the supply chain under BOTH “Jobs” and “Procurement”.
Companies are encouraged to consider jobs created within the assessment area as part of the “Jobs”
business activity while jobs created outside the assessment area would be captured as part of
procurement. However companies can decide the most appropriate avenue for measuring impacts related
to employment generation.
7 See note 6.
8 Taxes “borne” by the company include the amount a company pays as its own tax cost and taxes
“collected” by a company are those that are collected by the company on behalf of government. For the
latter category, taxes collected, the company does incur additional cost to administer the collection
process. “Taxes” generally exclude one-off payments/costs incurred for example in relation to securing
planning consent for a new development.
9 Individual governments may have alternative views on taxes. National differences in definition will need
to be addressed on a country-by-country basis.
10 GRI G3 Guidelines. www.globalreporting.com.
11 Financial Times. 19 January 2007.
12 SustainAbility. Taxing Issues - Responsible Business and Tax. See www.sustainability.com.
13 World Bank. “Taxes: The Global Picture”. www.doingbusiness.org/taxes
14 Some of the indicators suggested in Step 2 require modification based on the geographic area of
assessment.
15 The Framework encourages companies to use their own stakeholder identification and engagement
methods. Most importantly, companies should identify stakeholders that are likely to be impacted by the
operation and those that impact or influence the company. This should be based on the geographic area
of assessment. See Appendices for more information on stakeholder mapping.
16 Global Reporting Initiative. “Indicator Protocols Set: EC6”. See www.globalreporting.org.
17 Poverty Reduction Strategy Papers. See www.imf.org/external/np/prsp/prsp.asp.
18 World Bank Doing Business Reports. See www.doingbusiness.org.
19 UNDP Human Development Reports. See hdr.undp.org/en/.
20 There are some similarities between the terminology used in this Framework and the logical framework
used by many development agencies/multilaterals such as OECD and IFC. Direct impacts may include
what the logframe refers to as inputs, activities and outputs. The indirect impacts could include outcomes
and some impacts as they are referred to in the logframe. See glossary for more information on logframe.
21 OECD. Glossary of Key Terms in Evaluation and Results-based Management. 2002. See
www.oecd.org/dataoecd/29/21/2754804.pdf.

22 In some cases, it may be appropriate and more practical to use proxy indicators. Proxy indicators more
directly reflect the phenomenon or characteristic to be measured. An example of a proxy indicator for
measuring impacts on household income might be the ownership of key assets such as land, livestock
and luxury goods.
23 The REM criteria is based on the RATE (Relevant, Aggregatable, Time-bound, and Easy to track)
system used by the IFC and has been adjusted slightly for business.
24 It is important to note that not all of the indicators will be tracked over time. The objective is to build a
baseline and then choose the most appropriate indicators to be tracked over time.
25 Companies should be wary of raising the expectations of stakeholders and be careful not to be too
heavily influenced by the individual biases of stakeholders.
26 WBCSD. Doing Business with the World – The new role of corporate leadership in global development.
2007.
27 Isolating the business contribution to development is not a realistic ambition for companies who interact
with other actors in diverse and complex environments. This Framework aims to help companies better
understand where they sit in relation to others and what their potential is for enhancing or mitigating
impacts that link to the achievement of development goals.
28 A strong link can be defined as - The source of impact is very closely linked to the development priority
(i.e. very few indirect impacts between source of impact and development priority); many indirect
indicators have a relationship with development priority; and/or company has a good deal of control over
the achievement of the development priority through its activity. A weak link can be defined as - The
source of impact is linked to the development priority through a number of indirect impacts; very few
indirect indicators have a relationship to development priority; and/or difficult to determine whether
company has any control/influence over the achievement of development priority.
29 An example of magnitude can be understood through the provision of vaccines by a pharmaceutical
company. Although there is a strong link between provision of vaccines and improved health, the company
may be having problems with its distribution or sale of the vaccines and thus very few people have
benefited from their provision. In this case, there may be a strong link but a low impact.
30 The Voluntary Principles aim to guide companies in maintaining the safety and security of their
operations within an operating framework that ensures respect for human rights and fundamental
freedoms. See www.voluntaryprinciples.org.
31 IBLF and IFC. Guide to Human Rights Impact Assessment and Management. 2007 (road test draft).
32 GRI SO1 concerning nature, scope and effectiveness of mechanisms to assess or manage impacts.
33 Issues of safety and product labeling are addressed in Corporate Governance. Environmental
Management touches upon the disposal of products and services.
34 Purchase of goods and services from suppliers may be an indicator for direct impact of jobs and
procurement.
References
Page | 69

Development Publications
Beyond the bottom line – Why measuring impacts on society makes business sense
Over the past few years, several WBCSD member companies have explored
ways to measure the impact of their business activities on the societies in which
they operate. These innovations have in turn prompted the WBCSD, with its
members, to develop a common approach to measuring business impact that
can be used by all business sectors. This publication presents the resulting
WBCSD Measuring Impact Framework, and highlights the experiences and
lessons learned from those companies that have pioneered the thinking behind
the Framework. It explains why measuring and understanding a company’s
impact is good for business and good for society.
Investing in a Low-Carbon Energy Future in the Developing World
The need to address climate change while facilitating continued economic
growth and social progress is a key challenge facing world leaders today.
Investing in a Low-Carbon Energy Future in the Developing World explores
how governments and business can work together to solve these challenges by
aligning policies, mechanisms and tools with the commercial conditions under
which a business typically invests, in order to scale up private investment.
Doing Business with the World” - The new role of corporate leadership in global
development
This publication shows how companies can contribute to global sustainable
development through their core businesses. It offers a business perspective on
key challenges and opportunities for the development of poor countries, as well
as key messages for companies and governments on how to promote
sustainable business solutions that benefit the poor and the societies and
environments in which they live.

Promoting Small and Medium Enterprises for Sustainable Development
Published by the WBCSD in collaboration with SNV Netherlands Development
Organization, the Issue Brief explains how governments can help alleviate poverty
by focusing on small and medium enterprises (SMEs) and how larger corporations
can help themselves by including SMEs in their value chains.
Also available in Spanish
Business for Development - Business solutions in support of the Millennium
Development Goals
This report makes the business case for sustainable development by illustrating
how the private sector is taking an active role in the achievement of the Millennium
Development Goals. Singling out framework conditions as the most important
factor affecting business investment, the publication strongly advocates focusing
investment on a strong regulatory and legal framework, building the capabilities of
local enterprises, and improving core infrastructure.
Also available in Spanish and Japanese
A business guide to development actors
with the support of the InterͲAmerican Development Bank
Partners are often essential to the success of sustainable livelihoods businesses.
The International Business Leaders Forum and the WBCSD have jointly produced
a guide to introduce the business community to potential partners in the
development community. It is a first port of call for managers interested in working
with a development organization, but unsure of how and where to begin. More
profiles of development actors are available on the WBCSD online guide at
www.wbcsd.org/web/devguide.htm

Finding capital for sustainable livelihoods businesses
This guide focuses on how to source funding for a sustainable livelihoods
business. It aims to provide a blueprint for action. It will help managers decide
when to raise capital in-house and when to seek external funds. It explores public –
private partnerships, how to raise capital for local operational partners, and why
securing this funding may be core to the company’s success.
Doing business with the poor: a field guide
Realizing that stepping up their company’s presence in developing countries will be
crucial to their long-term competitiveness and success, some prescient WBCSD
members are launching into sustainable livelihoods (SL) business, defined as
“doing business with the poor in ways that benefit the poor and benefit the
company.” This guide shows how innovative SL business models are spurring
economic development and helping low-income communities and families build
more secure livelihoods.
Also available in Spanish, Portuguese, and Japanese
Purchase these publications online at EarthPrint Limited www.earthprint.com or order by email by
writing to wbcsd@earthprint.com

About the WBCSD
The World Business Council for Sustainable Development (WBCSD) brings together some 200
international companies in a shared commitment to sustainable development through economic growth,
ecological balance and social progress. Our members are drawn from more than 30 countries and 20
major industrial sectors. We also benefit from a global network of about 60 national and regional
business councils and partner organizations.
Our mission is to provide business leadership as a catalyst for change toward sustainable development,
and to support the business license to operate, innovate and grow in a world increasingly shaped by
sustainable development issues.
Our objectives include:
x Business Leadership – to be a leading business advocate on sustainable development;
x Policy Development – to help develop policies that create framework conditions for the business
contribution to sustainable development;
x The Business Case – to develop and promote the business case for sustainable development;
x Best Practice – to demonstrate the business contribution to sustainable development and share
best practices among members;
x Global Outreach – to contribute to a sustainable future for developing nations and nations in
transition.
www.wbcsd.org
About the WBCSD’s Development Focus Area
Through its Development Focus Area, the WBCSD is seeking to:
x Raise awareness of the business contribution to development, helping business and non-business
stakeholders understand what is possible by providing case studies, guides and tools
that advance our understanding of development challenges and opportunities for business.
x Advocate for change by working collaboratively with multiple stakeholders to create a more
enabling business environment and seek synergies between official development assistance
(ODA) and foreign direct investment (FDI).
x Act by working with our members, Regional Network partners and other stakeholders to broker
new business ventures that are both good business – profitable and hence sustainable – and
good for development.
Publications, case studies, speeches, and news articles on the topic of business and development are
available via the Focus Area’s website at http://www.wbcsd.org/web/development.htm

Measuring IMPACT Framework Methodology: Understanding the business contribution to society

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