At its core, the Protocol consists of four Stages, each with corresponding steps for companies to follow in order to understand, measure, value and improve their social capital performance.
This first version of the Protocol is the result of two years of collaborative development involving input from over 50 WBCSD member companies, an Advisory Group of 20 expert partners, and four WBCSD Global Network partners. However, it is just the beginning of the journey. The Protocol in its current form contributes to the vision of mainstreaming the measurement of social impacts by serving two core functions.
1. It provides a consistent process to guide companies through the journey of measuring, valuing and better managing social capital.
2. It provides a framework for collaborative action towards harmonized and standardized approaches.
1. A consistent process to guide companies in measuring and valuing social capital
The Social Capital Protocol (“the Protocol”) provides a consistent process designed to generate fit-for-purpose information for business decision-making. By following the steps in the Protocol, companies can build a customized approach based on the best available techniques for social capital measurement and valuation.0
While the Protocol can be used to measure and value the social capital impacts and dependencies of a whole company or an individual project, product or operation, it is not designed as an approach to individual program evaluation. A program evaluation focuses on whether an intervention is achieving its intended aims and outcomes. In contrast, the Protocol seeks to determine how (and by how much) a business activity increases, decreases, and/or transforms social capital; and the extent to which organizations depend on social capital for their operations. The aspiration of the Protocol is that every company using it will scale and integrate the approach across
The Protocol is not a formal reporting framework and does not assume or require that assessment results are reported externally. Nevertheless, some companies may wish to report their assessment findings and this is encouraged as a means to demonstrate risks, opportunities and value creation to stakeholders.
Although the Protocol leaves the choice of measurement and valuation approaches open to users, it is a broadly accepted framework and therefore provides confidence to companies that they are applying the best available techniques, as well as developing a solid foundation for future work around comparability and standard setting1.
2. A framework for collaborative action towards harmonized and standardized approaches
The longer-term aspiration is to move towards standardized and comparable techniques for social capital measurement and valuation. However, for business, this field is still in early stages and is rapidly evolving. To achieve this aspiration, the Protocol provides a framework for consolidating and harmonizing good practice. The Protocol stages and steps provide a logical structure within which to continue to collate and guide companies towards the most current tools, data sources and good practice in relevant techniques. The ongoing application of the Protocol will also help to identify gaps in this field that need to be filled, and to steer practitioners with common interests towards collaboration to advance the practice going forward.
Over the coming years, the Social Capital Protocol initiative will shape and drive collaborative action to achieve four goals:
- Mobilize a network of business champions from multinational corporations at both c-suite and operational levels to advocate for implementation and collaboration.
- Socialize the Social Capital Protocol with the most important practitioners and expert organizations in this space, building a network, community or coalition to drive new thinking, global engagement and collaborative action to advance the field.
- Standardize technical approaches within the Social Capital Protocol by promoting awareness, acceptance and uptake by governments and key global platforms.
- Enable companies to capitalize on their implementation of the Social Capital Protocol by ensuring the finance community and capital markets recognize and reward social value creation.
Box 1: Driving integrated thinking
The Protocol is part of a broader movement to enable companies to integrate people, planet and profit as drivers of sustainable growth. Over the last few years, the integrated thinking and reporting movement has made significant strides in shifting mind-sets about how we understand a company’s value creation. It has demonstrated the importance of measuring and valuing interactions with society for better management and provided a framework to consider the inter-linkages between financial capital and social and environmental externalities.
It is against this backdrop that the WBCSD embarked on its effort to build the Social Capital Protocol2. It seeks to contribute to the growing field of work on integrated reporting and sustainable value creation by building on work undertaken by organizations such as the International Integrated Reporting Council (IIRC), Sustainability Accounting Standards Board (SASB), Accounting for Sustainability, Global Reporting Initiative (GRI), among many others.
While these organizations focus largely on external reporting and disclosure, companies still struggle with understanding their impacts in a way that provides useful information for decision-makers to strengthen social capital for the benefit of society and business. The Social Capital Protocol aims to bridge this gap.
Integrating approaches between social and natural capital
The Social Capital Protocol is driven by the same purpose and based on the same concepts and principles as the Natural Capital Protocol developed by the Natural Capital Coalition. The Social and Natural Capital Protocols are critical parts of an evolving business toolkit to ensure social and environmental risks and opportunities are considered in corporate strategy and decision-making.
The Social Capital Protocol mirrors the four Stages and applicable guidance in the Natural Capital Protocol but has been adapted to the more diverse frames of reference and maturity levels in the social capital measurement and valuation field. In addition, it also incorporates terminology and frameworks used by practitioners and experts across human rights, social impact assessment, social return on investment, monitoring and evaluation, social life cycle analysis, and product social metrics, among other areas of relevance to social capital. Where significant references are made to the Natural Capital Protocol, text is marked in italics and references are provided.
0 The Protocol introduces the term ‘social capital’ to describe the resources and relationships provided by people and society. See the Concepts and Definitions section for further detail on how this terminology is being developed and applied to a business context.
1 Adapted from the Natural Capital Protocol
2 For more context see Towards a Social Capital Protocol: A Call for Collaboration.