Social Impact
Definition
Social impact refers to the significant positive or negative effects that an organisation's activities have on the well-being of communities and society at large. It encompasses outcomes related to health, education, employment, equity, and quality of life. Measuring social impact helps organisations understand and communicate their contribution to societal progress.
Why It Matters
Social impact measurement is becoming more sophisticated, with frameworks like the Impact Management Project providing standardised approaches. Organisations that can credibly demonstrate positive social impact gain advantages in stakeholder trust and access to impact capital.
Related Terms
Impact Investing
Impact investing refers to investments made with the intention of generating positive, measurable social or environmental impact alongside a financial return. It spans asset classes including private equity, debt, and public equities, targeting outcomes aligned with the SDGs. Impact investments are distinguished from ESG integration by their explicit intentionality and impact measurement requirements.
SDGs (Sustainable Development Goals)
The Sustainable Development Goals are 17 interconnected global goals adopted by all UN Member States in 2015 as a shared blueprint for peace and prosperity for people and the planet by 2030. They address challenges including poverty, inequality, climate change, environmental degradation, and injustice. Organisations increasingly map their ESG strategies and impacts to specific SDGs.
Stakeholder Engagement
Stakeholder engagement is the systematic process of identifying, consulting, and involving individuals or groups that affect or are affected by an organisation's decisions and activities. It includes employees, customers, investors, communities, regulators, and civil society. Effective engagement is two-way, transparent, and ongoing rather than a one-off consultation.
Materiality Assessment
A materiality assessment is a structured process for identifying and prioritising the ESG topics that are most significant to an organisation and its stakeholders. It typically involves stakeholder engagement, peer benchmarking, and analysis of business impact to determine which issues warrant strategic focus and disclosure. The output is usually a materiality matrix ranking topics by importance.