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.
Social impact measurement
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.
What can be measured?
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.
Qualitative and quantitative data
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:
Timing
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.
Tools for data evaluation
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 Nations1, 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:
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.
A principles-based method for measuring extra-financial value. It uses monetary values to represent social, economic, and environmental outcomes.
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:
Engaging stakeholders
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.
From measurement to value
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.
Telling a social impact story
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.
Creating meaningful social change
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:
