Private Sector Initiatives

Over the last several decades, the global business community has been embracing concepts such as corporate social responsibility and the double bottom line. Investors and shareholders are requiring that companies report on social performance. Companies are also voluntarily adhering to reporting and behavioral standards such as the Global Reporting Initiative guidelines, the OECD Guidelines for Multinational Enterprises, and Social Accountability 8000. The increasing corporate acknowledgement of corporate citizenship responsibilities has led to greater acceptance of social responsibility reporting and concepts such as the social return on investment.

The following are a few examples of what has been happening:

Accountability is an organization "committed to enhancing the performance of organizations and to developing the competencies of individuals in social and ethical accountability and sustainable development." It promotes social accountability tools and standards (including Accountability 1000), gathers best practices, and conducts training/certification. Accountability's membership includes BP, Coca Cola, DaimlerChrysler, Oxfam, and Nike.

The Atkisson Compass Assessment for Investors provides a quadruple bottom line comparison framework for investors. In addition to a potential investment's financial return, the Atkisson Compass also looks at the investment's impact on 1) nature 2) general economy 3) society 4) well-being of people affected. Read a brief write-up of the tool here.

The Balanced Scorecard approach to strategic management was developed in the 1990's. The approach views and analyzes the organization along four perspectives: 1) learning and growth 2) business process 3) customer 4) financial. New Profit, a venture philanthropy fund, has adopted the balanced scorecard approach to monitor investments, and reports on social indicators. In addition, it has developed selection criteria for new investments: 1) high social impact 2) social entrepreneur and leadership team 3) previous performance 4) capacity for growth 5) new profit fit and value-add.

Cost-Benefit Analysis has been widely used by the public sector to take into account social costs (i.e., human life, the environment). Theoretically, any social impact or cost can be monetized.

The Global Reporting Initiative works in collaboration with the UN Global Compact. It is developing a global framework for reporting on sustainability performance. The general guidelines are supplemented by specific sector guidelines, which contain more applicable indicators. Abbott Labs, AT&T, Microsoft and many other multinationals apply their guidelines in reporting. Recently, under a project funded by the Hivos Foundation and Triodos Foundation, six microfinance banks began using the GRI guidelines for their reporting. The project is called Transparency in Sustainability and Finance and a description can be found by clicking here.

REDF is a venture philanthropy group that focuses on social enterprise, measurement, organizational effectiveness, and "engaged philanthropy." Using the concept of social returns on investment, it has developed the OASIS, a comprehensive tracking and outcomes system for non-profits.

The Social Return Assessment. was developed by Pacific Community Ventures, a non-profit investment fund operator that invests in companies located in disadvantaged communities. The assessment was developed for internal usage, and primarily looks at the number and quality of jobs created by the companies held by the fund.