What is social return on investment?
Social return on investment, more commonly known as SROI, is a method of measuring and accounting for forms of value that are not solely based on traditional financial accounts. This can include social, cultural and environmental factors, and accounts for the ways our actions and activities can create and destroy value.
Where have you heard about social return on investment?
In 2006, a network was formed to ensure that the SROI method was continually in use and could be allowed to evolved. This network, now named Social Value UK (formerly known as the SROI Network) has over 700 members across the globe, including a number of high-profile companies in the UK.
What you need to know about social return on investment.
The use of SROI aims to improve wellbeing and reduce inequality by incorporating social, environmental and economic costs and benefits. It uses conventional monetary values to represent the social value – for example, a ratio of 3:1 indicates that an investment of £1 delivers £3 of social value. The current SROI model has seven principles:
- Involve stakeholders
- Understand what changes for those stakeholders
- Value what matters (also known as the 'monetisation principle')
- Only include what is material
- Do not over-claim
- Be transparent
- Verify the result
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