WBCSD Measuring Impact Framework
- 1. An Introduction to the WBCSD Measuring Impact Framework September 2013
- 2. The business case for measuring socio-economic impact WBCSD Measuring Impact Framework – Approach – Methodology Case studies Key lessons & conclusions Presentation overview
- 3. Why do companies measure their socio-economic impact?
- 4. The Framework aims to help companies measure and assess their societal contribution and use this understanding to inform operational and future investment decisions It is also designed to: underpin the business license to operate; improve the quality of stakeholder engagement; help manage risks more effectively enhance the business contribution to society improve efficiencies understand the role of business vis a vis governments Measuring Impact Framework
- 5. Built by business for business (working group of 20+ companies) Co-branded with the International Finance Corporation (IFC) Starts from what business does – business Moves beyond traditional reporting Encourages stakeholder engagement Flexible Complements existing tools Externally reviewed (WRI, GRI, Harvard, IFC, Oxfam, etc.) Key features of the Framework
- 6. 3 components of the Framework Online applicationThe business case Methodology
- 7. Methodology Stakeholder engagement Step 1 - Set boundaries Step 2 – Measure direct and indirect impacts Step 3 – Assess contribution to development Step 4 – Prioritize management response Measuring Impact Framework Decision by individual companies
- 8. Merging two perspectives Development/ societal perspective Economic Growth Poverty Alleviation Education Social Stability Public Health Human Rights Governance Capacity Building Enterprise Development Environmental Sustainability Broader development contribution Business perspective Infrastructure Products and Services Jobs Skills and Training Procurement Taxes Corporate Governance Environmental Management Business activity Direct impacts Indirect impacts
- 9. Business activities (STEP 1) • Corporate Governance • Environmental Management Governance & Sustainability • Infrastructure • Products & ServicesAssets • Jobs • Skills & TrainingPeople • Taxes • Procurement Financial Flows
- 10. Mapping the impacts (STEP 2) Direct Direct Indirect Indirect Indirect Activity Activity Indirect Direct Indirect CONTEXTUAL UNDERSTANDING
- 11. Decision making framework: response to impacts (STEP 3 & 4) MITIGATE PARTNER SCALE UP LEVERAGE DIRECT INDIRECT NEGATIVE POSITIVE Optional: Stakeholder Engagement
- 12. Case studies on application of the WBCSD framework Eskom – Measuring its footprint in South Africa Nestlé – Developing & piloting inclusive business models Saipem – Measuring social value creation at fabrication yard in Indonesia Newmont Ahafo Gold – Business linkages with local communities Ecosecurities – Project development tool for CDM & voluntary carbon markets
- 13. Success of the methodology: – Positive user response – Evidence of use for business decision-making processes – Results chain & indirect impacts – Stakeholder engagement Challenges: – Analyzing complex development issues – Location/context specific (no aggregation) – Examining negative impacts – Rapidly emerging impact measurement ‘landscape’ Lessons & conclusions
- 14. www.wbcsd.org/impact.aspx Kitrhona Cerri measuringimpact@wbcsd.org Download & more information
Editor's Notes
- #5: The Framework helps companies answer the questions:How can we leverage our core business activities as well as the strengths of other actors to boost economic growth and support social progress?How can we minimize operational and reputational risks?How can we engage with stakeholders in a more meaningful way?How can we adapt our products and services to the needs of the low income segment?How can we respond to changes in societal needs?How can we communicate with the government about our contribution to economic and social progress in a country?
- #7: Measuring Impact Framework components:“Beyond the bottom line” – Why measuring impacts makes business sense. This publication highlights the 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.Framework Methodology – This is the main document of the Framework which walks companies through the four step methodology. It includes a list of suggested indicators for 8 business activities as well appendices full of useful resourcesExcel-based user guide – This user friendly guide is designed to help companies move step by step through the assessment and customize the Methodology to their respective operations.
- #8: STEP 1 – SET BOUNDARIES1.1 Identify the objective(s) for the assessment1.2 Define the geographic area of the assessment 1.3 Collect development context information for the assessment area1.4 Select the business activities to be assessedSTEP 2 – MEASURE DIRECT AND INDIRECT IMPACTS2.1 Identify the sources of impact for each business activity2.2 Identify relevant indicators for direct and indirect impacts 2.3 MeasureSTEP 3 – ASSESS CONTRIBUTION TO DEVELOPMENT3.1 Determine the level of stakeholder engagement3.2 Engage with stakeholders to prioritize the development issues (optional) 3.3 Build hypothesis of the business contribution to development3.4 Test hypothesis with stakeholders and refine the overall assessment (optional)STEP 4 – PRIORITIZE MANAGEMENT RESPONSE4.1 Identify the priority areas for action 4.2 Consider possible management response and prepare recommendation to management 4.3 Decide on way forward4.4 Develop indicators to monitor progress
- #9: The Framework attempts to merge the business perspective of its contribution to development with the societal perspective of what is important where that business operates. It is about seeing and understanding the business contribution from different lenses.It is rooted in a business approach and begins with what business does through its business activities. The Framework identifies 8 business activities but companies are encouraged to customize this list to their specific operation/industry. 10 example development priorities are referenced in the Framework. These will change depending on the development context in the area of assessment. In some cases, the Millennium Development Goals may be used as the development priorities.