What

For each priority social capital issue identified in Stage 1, companies will determine the key audience and objectives and set the organizational, geographic, and temporal boundaries for measurement and valuation. These will be used to develop an ‘impact pathway’ (or ‘dependency pathway’) that provides a hypothesis for how business activities translate into social impacts and/or dependencies and helps identify what the company should assess. The steps in this stage are likely to be iterative and to inform one another, so the results of one step may require revisiting a preceding step. This is normal and should be factored in to an assessment timeline.27

Why

This stage ensures that the effort of measurement and valuation is targeted appropriately and produces fit-for-purpose results.   

    How

    Step 4. Determine target audience and objectives

    The first part of setting the scope of the assessment is determining the target audience and the specific objectives for measurement and valuation.

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    Step 5. Set boundaries

    Agreeing on the boundaries of the approach from the outset is important from both a conceptual and practical perspective. It not only provides clarity and focuses the approach but also ensures that resources are used efficiently and effectively.

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    Step 6. Define the impact or dependency pathway

    The last step in Stage 2 draws the links between the social capital issues identified in Step 1 and the business activities that affect or rely on them. 

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    Outputs

    By the end of Stage 2, companies should have an understanding of:

    • Who the target audience(s) is(are) for the assessment and how their needs might be reflected in the choice of scope and objective;
    • What organizational, geographic, and temporal boundaries the assessment is going to cover reflecting the need to achieve the objectives but complete the assessment within the limits of the resources available;
    • The links in the pathway that connect a business activity to the material social capital issues identified in Stage 1, and any indirect or unintended effects that are caused by the business activity; and
    • Therefore, which material outcomes and impacts the company should measure and value to achieve the objective of the assessment. 

    Practical considerations

    This stage can be completed fairly quickly depending on the level of buy-in and support of senior leaders and decision-makers. Some key considerations include:

    • Skills/expertise: This stage does not necessarily require specific technical skills. Companies may benefit from referring to the more detailed guidance within the recommended resources section, and potentially from support from external experts.
    • Timing: While this stage is not necessarily time or labor intensive, it is important to allocate sufficient time to socialize the proposed scope internally, to ensure that the key audience / decision-makers have the opportunity to inform the process and decisions on boundaries; and that they recognize the impacts or dependencies that result from the mapping process.
    • Stakeholder Engagement: Input from internal stakeholders, particularly the target audience, is essential to ensure that the scope aligns with their objectives. Input from external stakeholders will enrich the process and can be particularly valuable when mapping impacts on specific stakeholders.

    Recommended Resources

    Step 4. Determine target audience and objectives
    1. WBCSD, (2015), Social Capital in Decision Making: How social information drives value creation

    Step 5. Set boundaries

    2. GRI, (2005), GRI Boundary Protocol.

    3. GRI, (2014), The GRI G4 Sustainability Reporting Guidelines: Report Content and Boundary.

    Step 6. Define the impact or dependency pathway 

    4. NPC, (2013), Outcomes and Impacts Map: Employment and Training.

    5. Roundtable for Product Social Metrics, (2016), Handbook for Product Social Impact Assessment. 

    6. Social Value International, (2016), Supplementary Guidance for Principle 2: Understand what changes - Part One: Creating well defined outcomes. 

    7. World Bank and IFC, (2012), Designing a Results Framework for Achieving Results: A How-to Guide. 

    Footnotes

    27 Adapted from the Natural Capital Protocol