Measuring Corporate Community Impact Still a Challenge - Report

Measurement remains a significant challenge for corporations looking to assess the impact of their community investments, an Australian study has found.

Findings from the first phase of a research project by LBG and the Centre for Corporate Public Affairs suggest that existing approaches to social return of investment assessment, social cost-benefit analysis, social return on investment frameworks and participatory impact assessments are not meeting the needs of corporations.

The report, Measuring the social impact of corporate community investment by the Centre for Corporate Public Affairs, represents the first year of work as part of what is expected be a four-year study.

According to the study, social impact through corporate community investment (CCI) can be achieved most readily by companies strengthening their approach to how they manage their community investments, focusing on and clarifying the strategy of each investment, and strengthening the intent and nature of what they measure.

“Rigorous third party measurement, interrogating and assessing progress towards the clear strategic intent of the investment, has the most potential to evolve measurement towards an understanding of social impact,” the report concluded.  

“Executives accountable for managing CCIs in the companies participating in this study want a simpler, more effective, and over time, a widely used approach to measurement to inform decisions as to whether the performance of an investment warrants extending its duration, or shifting its focus.”

Return on community investment for corporations can include employee engagement, delivering business strategy (including social license to operate), and realising corporate responsibility objectives.

The research is being conducted with a view to developing a management process for corporate community investments that enables companies to understand if those investments are generating a social impact in the community.

Eight LBG members participated in the study, including Medibank, Woodside Energy, Coles, CSL, Mondel?z International, NAB, NZ Post and Optus.

LBG and the Centre for Corporate Affairs are currently working to secure participation in the study for the next phase due to commence in Q1 2014.

In addition to existing companies participating in the study, new participants, including large Not for Profit organisations, are invited to join the research.

“The effective assessment of the impacts on community and on business is the ‘Holy Grail’ of corporate community investment and we intend to find it for our members,” LBG Director Simon J. Robinson said, launching the project last year.

The LBG model was introduced to Australia and New Zealand in 2005 and has since grown to about 50 members.

300 companies around the world currently use the framework to measure and report the value and the achievements of the contributions they make.

It is named after the London Benchmarking Group, the group of UK companies who worked developed the model in 1994.

Download the Executive Summary here.