According to a new report "Social and Economic Impacts: Measurement, Evaluation and Reporting", corporate sustainability professionals are interested in looking beyond performance and understanding the whole impact of a company on the communities where it operates.

Why do companies think impact studies are critical?

To understand the whole picture, a company must monitor social and economic impacts on a community, and attempt to translate that to their stakeholders.

This is primarily translated through corporate sustainability reports.

Yet, a review of corporate sustainability reports from 60 multinational companies that consider themselves leaders in sustainability produced disappointing results:

• Banks largely limit reporting to employee volunteering.
• Manufacturing companies rarely report impacts beyond employees, volunteering and charity.
• Food and beverage and extractive companies generally provide the most comprehensive data, often reporting on indicators such as: support to their supply chain, engagement, employees, communities and local projects.

Digging a little deeper, Ethical Corporation analysts found that most companies are actually more interested in using impact studies to better understand the local business environment, to inform business strategy, and to improve community programmes.

Companies are realising how great an impact they can have on a local economy. The relationship between a big multinational company and a local community needs to be delicately managed.

Chris Burgess, Head of Sustainability at Vodafone, for example, argues that, “the healthier, the better educated, the more prosperous the local community is, the better it is for our business.”

A survey of 116 corporate sustainability professionals finds that these impacts should primarily being measured through: economic livelihoods for local communities (43%), sustainable engagement, volunteering and charity (35%), job creation (29%), human rights (17%), labour rights (16%) and poverty and economic inequality (15%).

What resources should a company budget for?

In relation to the benefits of impact studies, the costs required to produce them are minimal.

The following charts display typical costs, time commitments, staffing and scheduling of impact surveys.

Additional research findings can be found in a free summary, downloadable from www.ethicalcorp.com/impact.