INTHEBLACK August 2024 - Flipbook - Page 22
F E AT U R E
“If a company is doing good in society purely to
increase its profit and shareholder returns in a pure
commercial sense, that is not illegitimate, but it does
not feel quite right to most people.”
DR DAVID COOKE, ESG ADVISORY
decisions and tracking outcomes from
a financial lens over a period of time,”
Hong explains. “Social return on investment
is a popular method, assigning a financial
value to social impact relative to the funding
or investment made.”
Hong says there are several ways that
companies can approach social impact
measurement. For instance, the method
of mapping pathways, commonly known
as the “theory of change”, can help to clarify
the connection between a transformation
program’s inputs, activities, outcomes
and impact.
“This determines whether the impact
metrics or key performance indicators
identified to measure the impact created
are the best form of measurement, and
also if the data being collected best
represents the impact being created.”
Prioritising robust data practices
ensures reliable numbers for informed
IMPACT ASSESSMENT
FRAMEWORKS
Testing causality through impact assessment frameworks can
establish the effectiveness of social impact efforts, says Ian Hong CPA,
KPMG Singapore.
Impact assessment frameworks include:
• the OECD DAC framework
• Impact Management Project’s 5 dimensions of impact
• Social Return on Investment
• KPMG’s True Value methodology.
Companies can formalise these steps with frameworks and standards
such as Global Impact Investing Network’s Impact Measurement and
Management framework, IRIS+ Core Metrics, and Impact Management
Platform’s impact framework, Hong adds.
“This ensures systematic and comprehensive social impact
measurement and monitoring,” he says.
22 INTHEBLACK August 2024
decision-making in areas of funding, resource
allocation and addressing social needs, Hong
says. Investing in robust data management
systems and capacities can help monitor,
analyse and optimise the quality of data
being collected.
REPORTING WITH INTEGRITY
A company’s green credentials are subject to
increasing levels of scrutiny, as stakeholders
and regulators are clamping down on false
or misleading environmental claims.
A study by ESG data and research firm
RepRisk shows that in the 12 months to
September 2023, one in every four
climate-related ESG risk incidents was
tied to greenwashing. It also found that
bluewashing incidents without an
environmental component increased
by 15 per cent over the same period.
“Greenwashing is a big issue, and so
is ‘greenhushing’,” Cooke says.
“If a company is doing good in society
purely to increase its profit and shareholder
returns in a pure commercial sense, that is
not illegitimate, but it does not feel quite
right to most people.”
Assuring the numbers – and
communicating them authentically –
can reduce the risk of bluewashing.
IAASB’s Proposed ISSA 5000 General
Requirements for Sustainability Assurance
Engagements, for example, is expected to be
issued before the end of this year with the
aim of enhancing trust and confidence in
sustainability information.
However, data from KPMG’s ESG
Assurance Maturity Index 2023 shows
only 25 per cent of companies feel they
have the ESG policies, skills and systems
in place to be ready for independent ESG
data assurance.
“To ensure the accuracy of their social
impact numbers and to communicate
