What is a social impact statement?
A social impact statement, also known as a corporate social responsibility (CSR) statement, is a report issued by a company that describes the steps it has taken to address the impact of its operations on the communities in which it operates. It also describes its plans to improve its operations to meet social and environmental standards.
The report is usually distributed to shareholders along with the company's annual report.
As the social impact statement definition suggests, the report outlines measures the company has taken to improve the social and environmental standards of its business operations.
But first to understand the social impact statement's meaning, we should understand what social impacts are.
According to Professor Frank Vanclay from the University of Groningen in the Netherlands in International Principles for Social Impact Assessment, 2003, social impacts include: people’s way of life, their culture, community, political systems, health and well-being, personal and property rights, fears and aspirations.
How do social impact statements work?
While social impact statements have long been included in company activity reports, they have only recently gained popularity. Investors' growing interest in companies with high environmental, social, and governance (ESG) ratings has fuelled this trend.
Social impact statements explained the company’s values and priorities, commitments, facts and figures on their progress as well as the actual results on how it tackles social impact issues.
In details, social impact statements could include the following topics:
Hours spent by company employees to do volunteer works
Donations made to local communities and charities
The number of jobs created in the local area
Efforts to clean up the environment in the area
The use of renewable energy as a source of energy for operations
The total amount of energy saved
Reduced use of landfills
Social impact statement examples
Because some companies did not make serious commitments on the ground, critics of social impact statements saw the report as merely a marketing tool. Investing in socially conscious business activities incurs additional costs in the medium term, which large companies can provide in comparison to small and medium businesses.
An example of a social impact statement is the energy giant’s BP (BP) 2021 Sustainability Report. The report includes BP’s target to achieve financial investment decision (FID) for 20 gigawatts (GW) of renewable generating capacity by 2025 and 50GW by 2030.
In 2021, the company provided international scholarships for 100 students, of which 60% were women, through Global STEM (Science, Technology, Engineering, and Mathematic) academy. It was part of the company’s support on education to help people to develop transferable skills to work in energy and other sectors.
How to write a social impact statement
There are several tips to write an impact statement, whether its social impact or other impacts according to the College of Food, Agricultural, and Environmental Sciences at the Ohio State University.
First, an impact statement should be brief. It highlights how a company will make a difference for the public good with its programme, summarises achievement made, and payoffs to society.
An effective impact statement should have the following:
Provide quantifiable evidence of change or difference the research or program made
Give other evidence, such as testimonials or anecdotes
Realistically project potential benefit for work in progress
Provide enough detail to be easily understood
Highlight public benefits, outcomes, payoffs
The statement should explain what problems or issues the company’s work is addressing, what the company has done and the outcome.
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