Social Enterprises Need a Solid Measurement System

Authors: by Greg Hills and Marc Pfitzer
Source: HBR Blog Network

Companies seeking to create scalable social businesses need a measurement system that monitors their progress in delivering social benefits and economic value. Only by tracking both the social and business results and how they're connected can firms hope to have a large-scale social impact.

The problem is there is not yet a universal system for doing this. The Sustainability Accounting Standards Board is trying to create industry-based standards that will allow investors and other stakeholders to compare firms' environmental and social impacts, but it remains to be seen whether it will be able to tie its standards to value creation. The International Integrated Reporting Council is developing a common framework for companies to submit "integrated reports" on their financial, environmental, social, and governance performance. But it, too, remains very much a work in progress.
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