Social performance assessment is about evaluating the extent to which institutions meet their social objectives. These can include:
- serving increasing numbers of poor and excluded people sustainably
- improving the quality and appropriateness of financial services for target clients
- creating economic and social benefits for clients and reducing their vulnerability
- improving the social responsibility of financial institutions to their clients, their employees and the community they serve.
Traditional evaluation has focused on end results and impact. However, impact is just one element of social performance. Social performance looks at the entire process by which impact is created. It therefore includes analysis of the declared social objectives of institutions, the effectiveness of their systems and services in meeting these objectives, related outputs (for example, reaching larger numbers of very poor households) and indeed success in effecting positive changes in the lives of clients.
Different social performance initiatives focus on different steps in this process. Some focus on the institutional process and internal systems. Others assess social performance at the client level. Some are even holistic and encompass both internal institutional level as well as client level indicators.
Tools to Assess Institutional Process
These help institutions evaluate their intentions, systems and actions to determine whether they have the capacity to attain their social objectives.
Tools to Assess Client Conditions
These help determine who are being reached and if client conditions are improving.
Tools for Rating Social Performance
Several rating agencies have developed tools to complement their financial ratings. Some focus only on internal processes while others consider both client-level indicators and internal processes.