Measuring the impact of Corporate Social Responsibility (CSR) programs is a challenging process for most companies. CSR is cross-functional by nature, often encompassing a wide range of metrics and data around a company’s sustainability, suppliers, employee engagement, corporate philanthropy, diversity and inclusion, company culture, and more. In a sense, CSR is one of the truest reflections of a company’s brand: what’s the company’s real identity? Who works there? What values, practices, and principles does it (genuinely) stand for? How does the organization achieve its mission?
In most cases, CSR measurement, stakeholder alignment, and success also go hand-in-hand. Being able to make a strong business case for CSR programs (and their outcomes) - then backing up that ROI case up with compelling measurement - is the best way to win executive buy-in, support, and budget to grow your CSR programs.
In our work with CSR teams, we typically recommend and work around a 5-step process:
Your CSR pillars (themes) should reflect your brand. For example, if you’re a technology company, you might choose to focus your CSR initiatives on STEAM (Science, Technology, Engineering, Art, and Math) education and tech workforce diversity, because both of those impact areas align with who you are as a company. By comparison, a beauty company might look at gender and racial equity alongside its supply chain environmental footprint because those are more material to its brand. Look at your company identity and values: CSR should build on that foundation and be a vehicle for positive social and organizational change.
(Once you’ve established your CSR themes and focus areas, build a strong business case around them. Organizations like Havas, Starbucks, and TIAA have found clear correlations between robust CSR programs and employee morale, loyalty, and retention, so work with HR to understand employee recruitment and retention costs can be an initial first step. What are the business benefits to increasing employee retention by 33%? Can you put a number on it?
Similarly, are there other cost-savings associated with your programs? Or brand lift that can drive revenue?
Data consistently shows that not only is CSR the right thing to do, but, when implemented thoughtfully, it’s almost always ROI-positive for organizations as well.
Your next step is making sure each program or initiative has clear measurable KPIs (key performance indicators). In some CSR disciplines, these indicators are fairly clear cut: in sustainability, measuring your greenhouse gases (GHG) in terms of Scope 1-3 CO2 equivalents (CO2e) generated from operations is an established, material indicator and carbon accounting approach. In other areas like financial inclusion or education, impact accounting standards may be less uniform, and should be developed in conversation with stakeholders and partners.
Make sure to also select indicators that are material and relevant. For example, employee volunteering participation could be a meaningful indicator for employee engagement, but likely not for community impact, as there are often better ways your organization can help vulnerable communities. When CSR indicators aren't material (and then get communicated publicly) it raises the risk of provoking external criticism for "greenwashing" or being insincere. The more your programs and communication efforts focus on material change (and indicators), the better your reputational and brand-related CSR efforts will be.
Similarly, rather than trying to boil the ocean or appease everyone, focus on doing (and measuring) a few specific things well, then build from there.
While you know what's best for your business or brand, often your partners (ex: non-profits, suppliers, 3rd party experts, or a system like Brightest) will know the best way to measure meaningful impact. This is one of the main reasons we invest so much in supporting cross-organizational impact and sustainability collaboration inside our impact platform. Whether it's impact between a company and its non-profit partners, a foundation and its grant recipients, or a brand working with its suppliers around more responsible sourcing, the theme's always the same: it's always some combination of hard, slow, or incomplete picture doing it alone.
Be sure to listen, collaborate, and engage your partners in the measurement conversation.
Most CSR professionals understand the relationship between strategy, actions, impact, and outcomes. The challenge is creating a consistent process to efficiently get the data you need to measure results, report on success, and reaffirm your business. Make sure you have a way to get the underlying data you need to track each indicator.
The more you simplify, centralize, and streamline your data collection and management process, the more time you'll have to focus on program work, affirming your outcomes, and celebrating success. For more suggestions on CSR data collection, have a look at our Social Impact Data Collection Guide.
Effectively understanding and communicating CSR results and outcomes to stakeholders is one of the most important responsibilities of any CSR professional. Your CSR strategy and measurement approach should be closely tied to your communications strategy: where, when, how, and why are you telling your brand's CSR story? All the pieces need to fit together.
There are a lot of potential channels for CSR storytelling: internal communications, annual reports, websites, social media, press, ESG ratings providers - where are you focusing? And does your CSR measurement strategy provide credible proof your organization's achieving the impact and outcomes its pursuing (or claiming)?
Wherever you are in your CSR measurement journey, we wish you all the best as you continue making (and measuring) your impact. If we can be helpful at all (at any step in your process), please get in touch. A central part of our mission here at Brightest is enabling better data-driven decision-making (not to mention actions and communication) for good.