July 14, 2011
ICCR Launches Initiative to Improve Social Sustainability Measures
by Robert Kropp
The Social Sustainability Resource Guide argues for a focus on long-term impacts of corporate
activities in communities, and emphasizes a multi-stakeholder approach in addressing social issues.
Of the three pillars of ESG, environmental and corporate governance issues have been addressed more
frequently and with greater success by companies and investors, in large part because successful
outcomes can be more easily measured. Social issues, on the other hand, have tended to gain less
attention, even though—as the recently published Millennium Development Goals Report
2011 states—"accelerated action on the goals requires economic growth that is sustainable,
inclusive and equitable…achievement of the MDGs will require a rejuvenated global partnership."
Recognizing that few companies devote as many resources to social impacts as they
do to the environment, the Interfaith Center on
Corporate Responsibility (ICCR) has published a document which, according to Rev. David
Schilling, the director of human rights for ICCR, "is a platform for learning and sharing
experiences to help move the needle on how to measure social sustainability impacts, and for
working collaboratively to deal with the huge Millennium Development Goals (MDGs) areas."
The Social Sustainability
Resource Guide (SSRG) states, "While a number of companies have implemented sustainability
initiatives, few measure the social impacts of their operations and programs in communities." The
Guide seeks to provide direction for corporate implementation and measurement of social
"We want to know, and companies want to know, if what they're
doing is having an impact," Schilling told SocialFunds.com. "We have more than 3,000 companies that
are engaged in some sort of sustainability reporting, but how do we know what's being effective?"
There are, of course, many reasons for companies to intensify their efforts relating to
social sustainability. Their reputations, and even their licenses to operate, can be contingent
upon how effectively they address community relations. Their business operations benefit as well,
when social issues relating to education, health, and poverty show improvement.
can the effectiveness of corporate activity relating to social issues be measured? On issues
pertaining to the environment, progress can be measured by such quantitative concepts as reduced
greenhouse gas (GHG) emissions and cost savings through improved energy efficiency. However, such a
quantitative perspective is inadequate when it comes to social issues. As the Guide states, "There
needs to be a shift in focus from counting (the number of employees trained or the number of bed
nets distributed) to capturing outcomes and long-term impacts."
Using the example of the
distribution of malaria nets in Africa, Schilling said, "It's not enough simply to report the
number of nets distributed. Tracking over time, do malaria rates go down? In the longer term, does
life expectancy go up?"
"All of us—companies, nongovernmental organizations, investor
groups—are struggling with how to measure impact," Schilling continued. "The challenge for all of
us is to get away from short-term sustainability projects to longer-term relationships that develop
community sustainability over time."
At the heart of the Guide is its emphasis on
multi-stakeholder collaboration. When corporate social responsibility (CSR) initiatives originate
from within companies themselves and fail to take into the account the interests of local
individuals, community groups, and nongovernmental organizations, "adequate baseline information
regarding social context, and consensus about overall goals and outcomes" will be missing,
according to the report.
Instead of merely focusing on corporate performance, the Guide
continued, CSR efforts need to account for the impacts of their efforts on community well-being and
sustainability, as reported by those who are most affected.
"The social sustainability
process has to be multi-party and collaborative," Schilling said. "Answers will not be found by a
company devising its own key indicators and applying them to where it has operations. When we're
developing measurements, those communities that are most impacted need to be part of the process."
The Guide also contains a number of case studies indicating that while examples of
effective social sustainability may as yet be comparatively rare, successful implementation has
occurred. In Nigeria, starting in 2005, Chevron replaced the traditional oil company paradigm of
"development dumping," or companies alone deciding what communities need, with a Global Memorandum
of Understanding (GMOU) process. Chevron's efforts, the Guide stated, succeeded because "local
community members were involved from start to finish." Local people were employed for projects in
their communities, and community members supplied Chevron contractors with materials.
the Philippines, PepsiCo partnered with the Wholistic Transformation Resource Centre (WTRC) to form
WaterHope, an initiative for bringing safe, clean drinking water to poor communities. The water is
more affordable than alternatives on the market, and WaterHope provides free drinking water to
schools, churches, health clinics, and public transport stations.
To measure the success
of the outcomes of WaterHope, the partners adapted the model created by the London Benchmarking Group (LBG), whose framework helps
companies develop benchmarks and measure impacts on community investments. WaterHope has led to the
creation of some 150 associated microenterprises, and also initiated health and education community
A time-tested strategy for strengthening communities that has often
been employed by sustainable investors is shareowner activism, and the reports details how Domini Social Investments engaged with the US
steel company Nucor to address slave labor in its Brazilian pig iron supply chain. As a result of
Domini's engagement, Nucor committed to a number of policies to ensure that its supply chain was
free of forced labor, and also agreed to publish annual progress reports on the implementation of
The Guide concludes with a number of recommendations for investors,
companies, nongovernmental organizations (NGOs), and governments; however, as Schilling said, "This
resource is not the end of the story. Investors can't do it alone, companies can't do it alone, and
governments can't do it alone."
Schilling told SocialFunds.com that ICCR is scheduling a
series of webinars for members, companies, other key stakeholders, and mainstream investors as
well, perhaps through collaboration with the PRI Clearinghouse of the United Nations' Principles for Responsible Investment Initiative
"It's important to not just reach the ICCR family but the broader community of
mainstream investors as well," Schilling observed.