The vision of the Social Capital Protocol is to mainstream the measurement of social impact, enabling companies to integrate people, planet and profit as drivers of sustainable growth. This can only happen if social capital measurement and valuation becomes a part of the way a company does business. This integration will take time, which is why it is important that companies view the Protocol as an iterative process whereby an organization develops, strengthens and expands its approach over time.
Many companies start with a pilot study, which generates momentum internally for further studies. Other companies start with a corporate-wide study that is adapted at a site level or product level or expanded to include other parts of the value chain. Regardless of the path to integration, every company should continue to advance the approach drawing on internal lessons and new tools and resources as they become available.
The following are a few example business processes that could leverage the Social Capital Protocol process:55
- Strategic planning and goal setting: Social capital information can help guide corporate strategy by providing additional/different data on the company’s role in society and impacts and dependencies. A growing number of companies are incorporating the language of sustainable value creation into the way they communicate their business mission and contribution to society.
- Cost-benefit analysis: Social capital measurement and valuation is useful for analyzing net benefits or internal rates of return of specific investments. In doing so, it can provide another level of confidence to both business and social value creation.
- Impact assessments: Companies can align the process with existing environmental, social and financial impact assessments of new projects/operations, or human rights impact assessments that are part of due diligence outlined in the UN Guiding Principles on Business and Human Rights. This will help to better connect these activities to the wider business and provide a more complete view of social performance.
- Management systems: The Protocol process can be used in continuous improvement planning. For example, including safety indicators and the valuation process into the structured Plan-Do-Check-Act cycle can help translate the results into corrective actions for operations managers and make the valuation of social capital a part of regular measurement and performance evaluations.
- External reporting: Companies can integrate the Protocol into existing sustainability and financial reporting. The Protocol process provides a structured way to prioritize issues and strives to create credible, comparable data that is useful for stakeholders and shareholders. It is designed in particular to provide a solid foundation for Integrated Reporting.
There are many other business processes and systems into which the Protocol could be integrated. Some of these depend on the company structure and operations, as well as their current maturity with regards to integrating sustainability into core business functions. One way to help drive further integration is by customizing the Protocol to company-specific needs and building implementation tools and guidance that help embed the process and ensure that it is applied consistently across operations.
Putting Theory into Practice
55 This draws from the Natural Capital Protocol (p.108-109). It is a condensed version of the original table with more specific references to social capital.