Measuring what matters

In today’s increasingly interconnected world, profit is no longer the sole measure of success. There is a growing recognition that stakeholders are increasingly driven by environmental, social and governance (ESG) choices.

Sustainable growth is key to building a successful business and have a lasting positive impact on both the environment and society. Ensuring social aspects of ESG have more impact is now a top priority for many companies as they tell the story of the social changes they are contributing to. 

For many organizations, supporting environmental sustainability, social equity, and community development allows them to align profit with purpose. Building on increasing interconnections across the industries, communities, or projects, they are finding ways to bring about positive change.

To fully understand an organization’s social impact involves successfully measuring that impact. Determining who benefits most from social change and how they benefit is a benchmark of success for any social impact program.

For the most part, programs involve tracking key metrics, making timely program adjustments, and working with communities in social programs. Done well, a strong social impact program also embodies the commitment of an organization to greater transparency, accountability, and continuous improvement.

The easiest way to measure social impact is to identify key metrics related to a social initiative. Some social impact metrics may relate to all industries, while others are specific to particular industries. All metrics should be consistent and holistic in measuring, managing, and reporting on diversity, inclusion, and human rights to make a more positive impact on society.

Comprehensive and robust sets of data can enable organizations to transition from a conceptual social impact program to one that is more tangible and measurable. By gathering blends of qualitative and quantitative data will produce tangible outcomes that are clear, facilitating a deeper understanding of the social impact.

Strong social impact programs should aim for data which is: 

• Subjective; in that it includes quotes, images, or videos, which could be collected using surveys or focus groups.
• Focused; in that it specifically measures elements such as the number of participants or percentage change in behavioral choices which ensure social impact measurement metrics provide a holistic view of results.
• Effective; in that the data measures the difference the programs are making to people’s lives or the environment (including quality of life indexes, health outcomes, social empowerment outcomes).
  
• Cross industry: metrics measured might focus on increased social mobility, reduction in poverty rate, improved access to quality education, for example.
  
• Industry focused: metrics measured might include for the Energy industry, the social impact metric of energy poverty reduction; for the Financial Services industry, the social impact metric of increased financial literacy; or for Technology Industry, the social impact metric of increased digital literacy, for example.
  

When starting a new program or initiative, organizations should consider collecting and analyzing pre and post the measurement process to assess impacts and track progress.

For some programs it might be beneficial to collect data at a specific time in the program or service, like at the conclusion of a program, while for others, choosing definitions and measurements at the beginning and sticking with those definitions consistently for several years, might be more effective.

Either way, setting specific key performance indicators (KPIs) for the short, medium, and long term (e.g., number of services offered, number of people served, etc.) makes it easier to measure progress over time.

Evaluating social impact data often requires using tools and other resources, like strategic frameworks and models, created for this purpose. In addition to tools offered by the organizations such as the United Nations^[1], there are also many company tools and methodologies available including the KPMG True Value methodology.

Good tools help ensure that diverse perspectives are considered, enhancing the inclusivity and relevance of the goals and activities planned. They should encompass both qualitative and quantitative data, and, importantly, visualizations, which aid understanding and is specifically designed to set realistic goals and develop the most important outcomes for the organization. Some of the most common tools available include:

• Theory of Change: Allows users to develop a narrative of change supported by visualization that facilitates increased collaboration. It involves developing a roadmap using results from an assessment of how and why a desired change is needed.
• Social Return on Investment (SROI): A principles-based method for measuring extra-financial value. It uses monetary values to represent social, economic, and environmental outcomes.
  
• Logic Model: This is a more visual and graphical depiction of the logical relationships between resources, activities, outputs, and outcomes of a program or investment.
  

Effective social impact tools also employ a variety of ways to evaluate and assess the data that is collected as part of social impact measurement, including:

• Identifying positive and negative changes resulting from the program or service offered.
• Developing evidence-based theories/reasons for what went well, what needs improving and what needs changing. Theories can be supported by historical outcomes, research, and through feedback from stakeholders.
  
• Looking for patterns, such as whether beneficiaries with certain characteristics (e.g., age, gender, etc.) have particular impacts. Patterns can be assessed through statistical models such as cluster analysis, analysis of variances and regression analysis. 
  
• Gathering further feedback on why aspects of the program/service have been successful in achieving certain outcomes and unsuccessful with others, through stakeholder interviews and surveys.
  
• Creating dashboards to visualize an organization’s social impact metrics can streamline multiple data sets and improve consistency. This type of data-enabled approach helps to identify trends and creates clearer outcomes.
  

Using strong tools to undertake a social impact program allows organizations to better engage with their stakeholders, build trust and foster collaboration. With the “theory of change” process, for example, users can develop a narrative about why and how the social impact program is important. This tool also uses charts and diagrams, which facilitate understanding the social impact journey and outcomes through visualization.

Other tools focus on conducting surveys, interviews, focus groups, and listening sessions to gather feedback and insights. Many also involve stakeholders in the decision-making processes so they can collaborate on goal setting, strategy development, program design, and evaluation.

Ultimately one of the best ways to engage stakeholders is to work together, leveraging resources, expertise, and networks for greater social impact. If companies can collaborate with NGOs, governments, academia, and startups to address complex social challenges, they are likely to be resolved much more effectively and efficiently.

While strong stakeholder engagement is important for the success of the social impact program, putting a value on a program is also crucial. Social impacts are always likely to be important, but if they cannot be valued, they are unlikely to be sustainable.

Some social impacts are quantifiable in cost-benefit terms. Programs aimed at improving education, healthcare, or rehabilitating prisoners can reduce spend on remedial services by preventing or mitigating social problems, for example.

Companies can also reduce operational costs and resource consumption over time by increasing the efficiency of their social services. There is also the possibility to better identify and address potential risks, avoiding costly crises or legal liabilities. Overall companies with strong social impact programs build trust in their brands and can use their enhanced reputations to attract further investment in their social impact initiatives and business activities.

Where significant social or environmental impacts cannot be valued in a cost-benefit approach, companies can focus on areas where initiatives are creating social value more generally, including:

• Value of human life – for initiatives related to areas such as road safety, occupational safety, medical research or health regulation, the value of lives saved can be an important indicator of benefits.
• Value of health benefits – where an initiative leads to improved health standards, the following measures of the benefits are available including the cost of illness approach measures actual costs for the incidence of illness. 
  
• Value of time savings – where an initiative leads to time savings such as in travel, it can be a significant component of benefits. Two methods for valuing time savings are: behavioral assessment by surveying consumers and the opportunity cost of time. 
  
• Value of ecological/ environmental benefits - where an initiative contributes to environmental objectives, it may have benefits that can be valued by assessing outcomes including the improvement in water and land conditions, preservation of green spaces, increased climate resilience, or the enrichment of biodiversity and enhancement of nature.
  

There are multiple ways to present social impact results to have different audiences connect to those results. In addition to the practicalities of choosing hard copy reports, publishing articles in journals, sector magazines, newsletters, online reports, social media posts, website updates, interactive dashboards, or infographics, real human stories can also create engagement and illustrate success.

These might include people who have found a sense of belonging and inclusion fostered by a neighborhood center, achieved improved health outcomes associated with a sports club, had their dignity restored by access to a food bank, or appreciated the support gained from a women’s community group. When illustrated by high quality photographs, they can help to tell a powerful story and also provide valuable context for what the impact findings mean for that individual’s community. 

Over the better part of the past decade, KPMG in the UK has worked with worked with the organization Key4Life, providing mentoring, impact coach workshops and meet the employer/work taster sessions for ex-prisoners, aiming to reduce the rate of reoffending. As a firm, KPMG aims to promote lifelong learning and increase numeracy and literacy skills to drive opportunity for people from lower socio-economic backgrounds across the UK, which will in the longer-term, generate pathways to employment.

The prison population of England & Wales has risen around 90 percent between 1990 and 2016 and around 50 percent of people who leave prison reoffend within 12 months. As a result of the collaboration, over 70 percent of program participants are currently in employment and have a 14 percent reoffending rate compared to the national rate of 65 percent. Over half report an improvement in emotional resilience.

In 2024, KPMG in the UK announced that it is hiring ex-offenders, after a successful pilot program, to work across all parts of KPMG’s UK business. Some are working in senior roles in areas such as technology and consulting. With this social impact program, KPMG in the UK is aiming to give everyone, regardless of their background, a chance of success^[2].

Adapting the social impact measures in a way that is meaningful and accessible to audiences can result in positive outcomes for an organization’s overall social impact strategy. Different audiences will have different interests, needs, and levels of understanding.

For example, investment communities and fund raisers might be interested in the return on investment; experts might be more interested in the direct impact of various social impact measures, the KPIs and more complex concepts; while public bodies might be more interested in how the findings can inform policy decisions.

Companies want to make a lasting difference in the world. By systematically evaluating the outcomes and effectiveness of social impact initiatives, they can better identify what works, what doesn't, and why.

Done well, social impact measurement is not just a means of assessing past performance but is a forward-looking tool that empowers organizations to continuously learn, adapt, and innovate. It can help companies to extend their reach beyond their product and service offerings to make more impactful and lasting contributions to the societies and communities they serve. 

KPMG firms have dedicated economic and social impact measurement & reporting teams who work with a broad range of clients across all sectors. The teams can support you in a number of ways, including the use of our methodology which is designed to provide a stable framework for understanding the impact a company has on society, and how it can create greater social value. It can be applied to any company in any sector and can help build better businesses by improving decision making, enhancing reporting, and strengthening relationships as well as building the business case for innovation.

 KPMG teams can help you:

• Quantify: undertaking a detailed assessment of your organization’s most significant economic, social, and environmental impacts, both positive and negative.
• Engage: helping corporate decision-makers to understand wider value creation, including data-driven insights of impacts on people and the environment, enabling companies to reduce risks and to enhance drivers of growth.
• Report: enhancing ESG impact reporting – provide a far richer view of a company’s contribution to society than conventional financial or sustainability reporting alone, while also enabling clients to create points-of-difference in the marketplace.