Towards a Social Capital Protocol
A Call for Collaboration
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Measuring social impacts and dependencies for better business

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TOWARDS A SOCIAL CAPITAL PROTOCOL

About the World Business Council for Sustainable
Development (WBCSD)
The World Business Council for Sustainable Development (WBCSD), a CEO-led organisation of some
200 forward-thinking global companies, is committed to galvanising the global business community
to create a sustainable future for business, society and the environment. Together with its members,
the council applies its respected thought leadership and effective advocacy to generate constructive
solutions and take shared action. Leveraging its strong relationships with stakeholders as the leading
advocate for business, the council helps drive debate and policy change in favor of sustainable
development solutions.
The WBCSD provides a forum for its member companies - who represent all business sectors, allcontinents and a combined revenue of more than $7 trillion - to share best practices on sustainable
development issues and to develop innovative tools that change the status quo. The council also
benefits from a network of 65+ national and regional business councils and partner organizations, amajority of which are based in developing countries.
www.wbcsd.org

About the WBCSD Redefining Value Program
Redefining Value is a cross-cutting WBCSD work program, working on advancing the Measurement,
Valuation and Reporting of non-financial aspects of business impacts and performance.
The program’s objectives are to:

The WBCSD is delivering these objectives inthree ways:

1

Integrate natural and social capital
measurement and valuation into
corporate performance managementand decision-making,1

Consolidate the business voice andconvene a platform for greateralignment,

2

Improve the effectiveness of bothinternal and external non-financial
reporting, to reflect the true value of acompany and to disclose true profit and
cost,

2

Catalyzethedevelopment
andharmonization of tools and approaches
for corporate performance managementand decision-making which integrate
environmental and social, alongside
financial, concerns,

3

Accelerate progress to a world wheremore sustainable companies arerecognized and rewarded - and are
therefore more successful.

3

Manage a space for companies to learn,
exchange, promote innovations andshowcase leadership.

To find out more visit www.wbcsd.org/redefiningvalue.aspx

03

TOWARDS A SOCIAL CAPITAL PROTOCOLCONTENTSA CALL FOR COLLABORATION

4

Section1

THE NEED FOR ACTION		

6

Section2

A JOINT SOLUTION: THE SOCIAL CAPITAL PROTOCOL

9

Section3

BUSINESS IS ALREADY LEADING THE WAY		

13

Section4

THE ROAD AHEAD

15ACKNOWLEDGEMENTS

17

04

TOWARDS A SOCIAL CAPITAL PROTOCOLA CALL FOR
COLLABORATIONAs members of the WBCSD Redefining Value board, we are working towards our vision for the economy:by 2050 a business’s success should be measured by its ‘True Value’ and a company should use ‘True
Costs’ and ‘True Profits’ in its internal decision-making and external reporting. By this we mean thatvalue, costs and profits must be redefined to consider longer-term environmental and social impacts
and to reflect all externalities – costs and benefits. The end-game is a system where natural and social
capital are being managed as effectively as, or perhaps even better than, financial capital.
To achieve this vision, the measurement and management of corporate performance must evolve
to incorporate social, alongside financial and environmental, performance. Although there are asignificant number of tools available for social impact measurement, businesses are struggling to
identify fit-for-purpose approaches that will enable the use of social information to inform strategy anddecision-making. As companies work on tackling this challenge independently, we risk replicating ourefforts and further fragmenting an already complex landscape.
Developing a credible and broadly accepted approach is essential, not only to demonstrate our
performance to stakeholders and shareholders, but also to ensure the effort of measuring and reporting
informs a continuous movement towards more socially sustainable practices.
With this paper, we are calling on organizations, experts and practitioners, across sectors anddisciplines, to join us in consolidating these efforts. The pages that follow put forward a proposal
to jointly develop a harmonized approach for businesses to measure and value their interactions
with society: a Social Capital Protocol.
It is clear that the WBCSD cannot, and would not want to, achieve this ambitious goal alone. Our
proposal demonstrates the result of valuable contributions from members, partners and peer reviewers.
This must continue to be a collaborative effort in order to build the critical mass necessary to ensure alegitimate and broadly accepted result for companies, shareholders and stakeholders. Only by working
together can we ensure an outcome with the power to truly transform the way we do business.

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05

TOWARDS A SOCIAL CAPITAL PROTOCOLPeter Bakker,
CEO, WBCSDJose Lopez, EVP,
Operations, Nestlé

Katherine Garrett-Cox,
CEO, Alliance Trust

Masatoshi Sato,
Senior Corporate Adviser,
Sompo Japan Nipponkoa
Insurance

Aileen Lee,
Program Director, The
Gordon and Betty Moore
Foundation

Kersti Strandqvist, SVP,
Sustainability, SCA

José Roberto Lettiere, CFO,
NaturaMarie-Claire Daveu,
CSO, Kering

Jean-Marc Huet, CFO,
Unilever

WHAT DO WE MEAN BY SOCIAL CAPITAL
A broad variety of concepts are currently being used to describe the interactions between businessand society. The WBCSD is using ‘social capital’, to refer to a company's positive and negative impact
and dependence on people and society. This encompasses human capital (people's skills, experienceand knowledge), social capital (societies' shared values, norms and institutions), relationship capital(connections and networks) and wellbeing, as well as the concept of socio-economic impact.
Combining these concepts into a single term facilitates the consideration of the stocks and flows
of social capital alongside financial and natural capital. Critically, this definition goes beyond themeasurement of social impact to also consider the ways in which business depends on people andsociety. This will help companies to understand how social capital relates to their business drivers andhow its effective management underpins sustainable performance.
As this work progresses, we will continue to develop the concept of social capital for practical use bycompanies and their stakeholders.

06

TOWARDS A SOCIAL CAPITAL PROTOCOLThe need for action
SECTION 1

A transformation is required in
the way business interacts withsociety

The business case for bettermeasurement and management
is clear…

The world is facing a series of rapidly intensifyingsocial issues which, unless managed, will
escalate exponentially as we approach a
global population of 9 billion people by midcentury. Despite significant advances in poverty
reduction and well-being, there are still pockets
of societies characterized by persistent poverty,
rising inequality, economic instability andexclusion, and a broadening skills gap.1

In this challenging context, the business casefor measuring and managing social impact has
never been clearer. It ranges from the needto minimize harm, manage social risks andminimize social disruptions, to opportunities tostrengthen the value chain and develop new
products and markets that benefit consumers
and their communities. Steering companies
towards achieving these objectives requires
better decision-making, which must be
underpinned by appropriate measurement andmanagement approaches.

Corporations are affected by these issues, butthey also have the power to either alleviate or
aggravate them. Companies depend on people
as employees, customers, suppliers, distributors,
retailers, governors and neighbors. Therefore
the engagement, effectiveness and well-beingof these individuals and groups are essential toa business' own health and success.
This realization is motivating forward-thinking
companies to consider how they can enhancetheir contributions to society throughout theiroperations and supply chains. However, themechanisms to achieve this are not necessarily
clear and high profile incidents continue tohighlight business' negative social impacts.
Given the breadth of multinational value chains,companies are still struggling to eradicate
human rights transgressions, unsafe working
conditions, discrimination, bonded and childlabor, alongside perceived economic exclusion
resulting from corporate activities. This has led
to damaged trust, more difficulties gaining asocial licence to operate and increasing calls
for higher standards and stronger regulation of
corporate behavior and external disclosure.

…but the current landscapeof tools and approaches iscomplex
Unfortunately, today's measurement andmanagement tools do not make it easy forcompanies to work towards the business caseillustrated above. There are currently over
150 tools and resources available for assessing
social impacts, which are based on different
assumptions, intended for different audiences
and focused on different types of impacts2.
This growing toolset is increasingly difficult forbusiness to effectively utilize – particularly giventhat the majority of approaches are designedwith international development organizations,foundations, and social investors, rather thancorporations in mind.

In order to secure access to social resources,
minimize negative impacts and enhance positive
contributions, business needs to transform theway it understands and manages its interactions
with society.

1. See here: http://www.wbcsd.org/social-impact/overview.aspx for a moredetailed description of the trends which are driving business to address socioeconomic transformation, as identified by the WBCSD Social Impact cluster.
2. A comprehensive database of Tools and Resources for Assessing Social Impact(TRASI) is managed by the Foundation Centre: http://trasi.foundationcenter.
org/

See here for an overview from McKinsey & Company of who is doing whatin this space: http://mckinseyonsociety.com/social-impact-assessment/
whosdoing-what/

07

TOWARDS A SOCIAL CAPITAL PROTOCOLReduce cost and risk

SECTION 1

Figure 1: Why measure and manage social impacts and dependencies?3

Capture opportunity

Obtainor maintainlicence tooperateImprovethe businessenabling
environment

Optimize
resource
management

Strengthen
value chains

Fuel productand service
growth andinnovation

Mitigate the riskof negative publicity,protest and declining
government support
for current and future
operations

Advance theright mix of rules,
incentives, support andpublic services

Ensure theongoing safety,
engagement,
development
and availability of
appropriately skilled
resources.

Improve theperformance,stability and capacity
for growth of suppliers,
distributors and retailpartners

Develop new products,
services and businessmodels and improveexisting offerings

In “Measuring Socio-economic impact: A
guide for business”, WBCSD has narrowed
this landscape down to 10 tools which aredesigned for and actively used by business. The
guide helps companies identify the right tool,or combination of tools, that best meet theirneeds. This analysis is both an art and a science,as many of the tools are designed to be flexible,
need to be customized for use, and are still
evolving with updates and new additions.4

In addition, there is increasing activity focusing
on the valuation and monetization of social
impacts. Section 4 of this paper features anumber of leading companies’ efforts in thevaluation of social impacts through corporate
and portfolio performance tools, product social
impact assessments, social return on investment
studies5 and evolving monetization approaches- including the emergence of the first social
profit and loss accounts6.

3. Adapted from WBCSDs publication “Measuring socio-economic impact: A
guide for Business”, p9

6. New methodologies covering social and environmental valuation have beenreleased by both PWC and KPMG, with a number of client examples: http://
www.pwc.com/totalimpact; http://www.kpmg.com/truevalue

4. To access WBCSD tools and resources on social impact measurement, see:
http://www.wbcsd.org/impact.aspx
5. Find out more about SROI:http://www.thesroinetwork.org/what-is-sroi

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TOWARDS A SOCIAL CAPITAL PROTOCOL

We need a harmonized solution
SECTION 1

The ongoing proliferation of tools andapproaches illustrates the increasing ambitionsof business in the space of measurement andvaluation, but also highlights that there is still
no general consensus providing assurance to1
2
3

stakeholders and shareholders that a business'procedures are sufficient of fit for purpose. In
this context, business is calling for a commonly
accepted approach to the measurement andvaluation of social impacts and dependencies
which will:

Clarify best practice for businessby providing a focal point for the development of best practice approaches,
tools and standards for social performance measurement and management.

Scale up the positive social impacts of businessby informing appropriate action throughout a company's operations andsupply chain.

Improve business credibility
by providing a solid foundation for companies to report or disclose theirimpacts and dependencies externally, building on existing frameworks suchas the International Integrated Reporting Framework.

09

TOWARDS A SOCIAL CAPITAL PROTOCOLA Joint Solution:
The Social Capital Protocol•

Principles that can guide users
throughout
theSocialCapitalProtocol process. Because the protocol
will be flexible, principles will be important
to help provide consistency and credibility
in its application. They will be needed to
guide decisions where choices must be
made between methodologies, approaches
or issues. Without reinventing the wheel,
the principles will be based on the mostcommonly used principles in existing
frameworks7.

•

Practical methodologies, tools andguidelines that will be needed tosupport the delivery of the Social
Capital Protocol.
The protocol can
provide a coherent framework thatwill map and harmonize existing tools
and methodologies. It will provide
companies with a complete set of practicalmethodologies and guidelines, clearly
identifying any gaps that exist.

A Social Capital Protocol will provide a
consistent process for businesses tomeasure and value their impacts anddependencies on Social Capital. Its
primary purpose will be to inform and improvebusiness decision-making and strategy. This
will also enable improved stakeholder dialogue,
assurance and external reporting.
The majority of processes and frameworks formeasuring and valuing social impacts follow asimilar set of logical steps. In developing theSocial Capital Protocol, we would seek to distill,align to and build upon existing and ongoingwork to move towards a consistent approach.
The development of the Social Capital Protocol
will need to be inclusive, consultative andprovide a platform for iterative development as
the field progresses. Therefore, the consistentprocess should be supplemented by two
additional components:

Figure 2: Social Capital Protocol
Components

Developing a Social Capital Protocol will
require a collaborative approach across sectors,
stakeholders and fields of expertise in order tobuild the breadth of engagement necessary todeliver a generally accepted approach.

Consistent
Process
Provides an agreed setof logical steps as the
backbone of the protocol

Principles
Guide users in theapplication of the protocol

Methodologies,
Tools and
Guidelines
Applied by users to deliver
the protocol

7. See, as examples, the principles used by the Social Return on Investment
Network, the GHG Protocol, the Integrated Reporting Framework, the Global
Reporting Initiative, and the Sustainable Accounting Standards Board.

SECTION 2

Proposing a Social Capital
Protocol10

TOWARDS A SOCIAL CAPITAL PROTOCOLSECTION 2

Bringing the proposal to life

be applied at the corporate level and canequally be adapted to project, product, site andregional level processes. The analysis involved
will inform and connect to a broad range ofcorporate activities including, for example,
compliance and due diligence, risk management
and mitigation, issue remediation, performance
improvement, strategy, and resource allocation.

We have outlined five illustrative steps todemonstrate the methodologies, tools andguidance companies would need in order
to effectively identify, measure and manage
their social capital impacts and dependencies.
These steps are drawn from common elements
across the numerous social impact assessment
approaches in circulation. They also build uponestablished WBCSD approaches, including
the Measuring Impact Framework, the GHG
Protocol, and the emerging Natural Capital
Protocol.8 The process will be flexible anditerative, allowing companies to use the insights
revealed within each step and throughout
each cycle to improve their approach. It can

The results produced by this process will, firstand foremost, inform decision-making, strategy
and action within an organization. They will
also provide a solid foundation for conducting
formal assurance and for integrating the insights
generated into internal and external reporting.

Figure 3: A proposal for a consistent process for businesses to measure and value theirimpacts and dependencies on social capital
Clarity of aims and limits
will focus organizational
resources

Prioritizing theright issues
will drivecommitment andsupport value
creation

3.
2.

Reliable access to tailoredinformation will support
targeted action

Measureimpacts anddependencies

Set objectives,
scope andboundaries

1.

4.

Identify
impacts anddependencies

Analyze value

Analyzing thevalue of social
capital will enable
its use alongsideother businessinformation

5.
Integrating the process
and results into decisionmaking will result in
more integrated thinking
and ensure social capitalis actively managed

Validate andintegrate
results

8. To further harmonize approaches for business, we aim to align the Socialand Natural Capital Protocol processes. The structural elements of the Natural
Capital Protocol are currently being developed, tested and refined and we willcontinue to connect and revise the two approaches at critical points in thedevelopment process. For more information on the Natural Capital Protocol,
see http://www.naturalcapitalcoalition.org/natural-capital-protocol.html

The process andresults will facilitate
assurance andenable more
useful and credible
reporting

11

TOWARDS A SOCIAL CAPITAL PROTOCOL

Step 1: Identify impacts and dependencies
Companies should identify and articulate potential social impacts and dependencies, both positive
and negative, throughout their business models and value chains. They should be clear on whether
the issues identified are relevant to business operations, shareholders or stakeholders.

A widely accepted inventory of potential social impacts and dependencies as a basis for considering whichissues are relevant to their organization and stakeholders. This will help to clarify the links by which businessactivities translate to socio-economic impacts along their value chains and 'results chains'.9
Consensus on the business role across the specturm of social issues. In many cases, agreement still needs to bereached on when an issue should be considered appropriate for a business to manage, and how far business
responsibility should extend.
Guidelines for stakeholder engagement at corporate and local levels, covering the identification of necessaryinternal and external stakeholders and appropriate modes and timelines for engagement.
Geography and industry-specific data for the identification of social impact hotspots.

Step 2: Set objectives, scope and boundaries
Based on the impacts and dependencies identified, companies should define the objective of theirsocial capital measurement and management activities, identify the appropriate scope and draw theboundaries of their analysis. This could include determining issues, value chain coverage, geographic
focus, organizational levels and time period to be covered by the analysis as well as the audiences whowill use the results.
Companies need:
Guidelines for defining the scope and boundaries of their measurement and management activities, basedon the impacts and dependencies identified. Consistency and comparability is needed across the different
definitions of scope and boundaries currently in use.
Guidelines for setting business objectives to aid companies in establishing their business case, setting theirambition level and designing an appropriate responses.

Step 3: Measure impacts and dependencies
Based on the objectives, scope and boundaries determined, companies should define appropriate
indicators, metrics and data sources, then collect and interpret this information.
Companies need:Standardized indicators and metrics for social impacts and dependencies that reach, where possible, beyond
process or output indicators towards capturing outcomes and long-term impacts. This should be combinedwith guidance for constructing new / more specific indicators as the need arises.
Agreed approaches for measuring key social impacts and dependencies to improve consistency andcomparability.
Reliable data sources at multiple levels and across geographies to reduce the data collection effort, raise
confidence in results and provide a solid foundation for decision-making.

9. For an explanation of the results chain, see section 2 of Measuring socioeconomic impact: a guide for business. http://www.wbcsd.org/Pages/
EDocument/EDocumentDetails.aspx?ID=15357&NoSearchContextKey=tr
ue.

SECTION 2

Companies need:

12

TOWARDS A SOCIAL CAPITAL PROTOCOL

Step 4: Analyze value

SECTION 2

Valuation can be applied to make results comparable and ready to utilize alongside other types of
information. Monetization is one form of valuation allowing social values to be analyzed alongside
financial information and other monetized values, such as Natural Capital. The scoring scales utilized
in Life Cycle Analysis are another example of non-monetary valuation for comparing product impacts.
Companies need:
A social accounting standard to define appropriate methods for valuation and monetization of social impacts
and dependencies and allow their consideration, alongside financial information, for corporate decision-making.
Agreed values/valuation approaches for social impacts and dependencies to legitimize the practice of
valuation, clarify when valuation is appropriate, and generate confidence in the values applied.

Step 5: Validate and integrate results
Currently, the results of social impact assessments are primarily used to promote and communicate thepositive impacts of companies on communities as a basic requirement for corporate social responsibility.
However, the integration and use of this information within core operations of companies is in its infancy
and companies are not yet able to use the information collected to improve business performance andstrategy. The use of the protocol will ensure that the information gathered relates to both positive andnegative impacts and dependencies, is embedded throughout organization and is used to drive better
decision-making for improved social capital performance management.
Companies need:
A shared understanding of the benefits of measuring and managing social impacts and dependencies for
a company, in particular, how this practice can mitigate risk, identify opportunities and drive value for thebusiness.
Guidance on embedding new social information, insights and drivers into corporate performancemeasurement, management and decision-making tools and processes.

THE CHALLENGE OF DATA AND METRICS
Defining standardized social metrics and gaining
access to appropriate and reliable data, in a waythat is practical, affordable, and pragmatic forbusiness, remains a huge challenge.

Through the protocol development process,a series of crucial questions will need to beaddressed:

Q How could metrics and data be standardized, shared and made more useful for companies,
while balancing the perspective that each organization needs the freedom to define their own
internal KPIs?
Q What systems could be used to gather, manage and channel social data within an organization?
Q Which partnerships could be built to aid business in collecting social impact data outside theoperating boundaries of a company?
Q Could better collaboration be established to build the social preference and social value datanecessary for consistent and reliable monetization?
Q How can the protocol best align and build upon reporting standards, including the Global
Reporting Initiative, those being developed by the Sustainable Accounting Standards Board, andthe International Integrated Reporting Council?

13

TOWARDS A SOCIAL CAPITAL PROTOCOL

Business is already leading the way

In many cases companies are going beyond
publicly available tools to design theirown tailor-made initiatives. These focus
on a range of perspectives and, mostsignificantly, utilize different approaches tovaluation including corporate and portfolio
performance assessments, product social
impact assessments, social return on
investment studies and emerging monetization
approaches.

Corporate and portfolio performanceassessment:
Companies are developing unique approaches
to measure and manage social performanceat the corporate level, and for investment
portfolios.
ArcelorMittal South Africa has developed
a customized methodology based on the
WBCSD Measuring Impact Framework to
objectively assess the social, economic andenvironmental impacts of its operations on
South African society. Based on the analysis,
each impact area is classified as ‘mostly
positive’, ‘positive and negative’, or ‘mostly
negative’. Its regular application allows
identification of key areas where performancecan be improved and informs specific,
actionable steps10.
SABMiller’s Sustainability Assessment Matrix(SAM) uses five levels, ranging from minimum
standard to leading edge, to assess the
progress of their businesses around the world
based on their sustainable development
imperatives. The results, combined with a wide
range of additional performance indicators and

10. See the resulting ‘Factor Report’ from ArcelorMittal South Africa, detailingthe methodology and results: http://southafrica.arcelormittal.com/
Portals/0/Factor-report-final-final-26-Jun.pdf
11. http://www.sabmiller.com/sustainability/reporting/sam-reporting-tool
12.http://wbcsdservers.org/web/wbcsdfiles/RedefiningValue/WBCSDLafarge_Sustainability_Compass_2.pdf;https://www.youtube.com/
watch?v=hUFMAfuUUUQ

supplementary data for the business globallyand locally, are made publicly available toexplore via their SAM reporting tool11.
Lafarge has developed the Lafarge
Sustainability Compass, a new strategic
methodology to allow country management
teams to tailor their sustainability strategy to fit
their specific local context. The methodology
also helps country management teams toassess their performance and maturity levelin ten main “impact areas” around naturaland social capital defined through the lens ofstakeholders and then uses its Sustainability
Ambitions 2020 program to make progress oneach impact area. Based on this assessment,
managers can identify key issues for theirbusiness and stakeholders, select priority
areas on which to act and draw up actionplans which combine business growth with
ambitious targets for sustainability12.
Schneider Electric has set up a sustainability
scorecard - the Planet and Society Barometer-that tracks major sustainable development
challenges for the company. Key Performance
Indicators (KPIs) are used to inform and track
improvement plans defined based on external
inputs and internal consultations. The resultof each KPI is converted into a score outof 10, and the corporate level scorecard iscomposed of the equally weighted average of
all indicators. The results are externally audited,and demonstrate progress on sustainability
improvement plans for the group as a whole13.
Alliance Trust uses a ‘Sustainability Matrix’
to identify well-run sustainable companies
that have better investment potential thanthe market. Companies are assessed andrated on two axes: Product Sustainability andManagement Quality. Product Sustainability
assesses the extent to which a company’s corebusiness helps or harms society and/or theenvironment. An A rating indicates a company
whose products or services contribute tosustainable development while an E rating
indicates a company whose core businessis in conflict with sustainable development.
Management Quality assesses whether a13.http://www2.schneider-electric.com/sites/corporate/en/group/
sustainable-development-and-foundation/planet-and-society-barometer/
our-sustainable-development-scorecard/our-sustainable-developmentscorecard.page

SECTION 3

Delivering a harmonized protocol is clearly an
ambitious undertaking. It is reassuring to knowthat we are not starting from scratch. In fact,
we are building upon a wealth of experience,solutions and ambition from companies who
are already leading the way in social capital
measurement.

14

TOWARDS A SOCIAL CAPITAL PROTOCOL

company has appropriate structures, policies
and practices in place for managing its ESG
risks and impacts. Management quality,
in relation to the risks and opportunities
represented by potentially material ESG issues,
is graded from 1 (excellent) to 5 (very poor).

SECTION 3

As part of the Impact Measurement Working
Group of the Social Impact Investment
Taskforce established by the G8, J.P. Morgan
has participated alongside leading thinkers in
impact investing to lay out the phases of impact
measurement and develop guidelines for
impact investors. The results provide a common
foundation for impact investors and the grouphighlights the importance of moving towards“a standardized impact measurement andreporting system that enhances the availabilityof material, reliable, comparable, ‘additional’,
and universal impact data”. J.P. Morgan also
recently published Impact Assessment inPractice (May 2015), a collection of 68 casestudies from 21 investors sharing their processes
for the assessment of social and environmental
outcomes from their portfolios.14

Product social impact assessment:
Building on the established field of environmental
Life Cycle Analysis (LCA), companies are working
on better understanding the social impacts of
their products.
ArcelorMittal is also working with two leading
universities in France and Canada, to develop
a methodology to assess the social value ofsteel along the value chain. This adds a social
dimension to the company’s existing expertisein lifecycle analysis, so that it can provide moremeaningful and comprehensive information
about the sustainability impacts of steel tostakeholders, in particular governments,
regulators and customers.
DSM is already applying a form of social LCA
within its People+ program. In the absence ofan existing methodology, DSM developed thePeople LCA tool that measures the impact of theirproducts on the lives of consumers, employees
and communities along their value chain. This
helps to identify levers for innovation, sharpen
value propositions, mitigate risks and engage
with customers and suppliers15.
14. http://www.jpmorganchase.com/corporate/Corporate-Responsibility/
document/impact-assessment-in-practice-2015.pdf
15.http://www.dsm.com/corporate/sustainability/people/people-plus.
html
16. http://product-social-impact-assessment.com/
17. The Reaching Full Potential project working group consists of Aditya BirlaGroup, AkzoNobel, BASF, DSM, Eastman, Evonik, Henkel, Mitsubishi Chemical,

Companies are also coming together todefine a common methodology. A numberof companies, including WBCSD members
BASF, BMW Group, DSM, Goodyear, Philips,
AkzoNobel and L’Oreal, are working with theRoundtable for Product Social Metrics to advancelife cycle indicators and approaches for social
sustainability assessments at a product level andrecently published the Handbook for ProductSocial Impact Assessments16. Within WBCSD,
the Reaching Full Potential project consisting of
11 chemical companies17 is currently building
upon this guidance to develop and pilot agreed
product social life cycle metrics for the sector.

Social Return on Investment (SROI):
A number of companies are applying SROI
analysis to better understand the contributions
specific programs and services are making tosociety in monetary terms.
BT commissioned the economic researchcompany Just Economics to adapt the SROI
methodology to analyze the value of digital
inclusion activities for the first time. The findings
demonstrate a social return of investment on
their Get IT Together program of £3.7 for every£1 spent. They also estimate that the social valueof being online is worth over £1,000 a year toindividuals for new users, and over £3,500 ayear for professional users. BT has made themethodology available as an open source tool
to aid further studies18.
Driven by the establishment of the UK PublicServices (Social Value) Act 2012, Veolia uses
SROI analysis to demonstrate the additionalsocial value it delivers through local government
contracts. Their first study was conducted inpartnership with a client, the London Boroughof Southwark. The results demonstrated that,for every £1 spent by Veolia as part of theircontract, £2.09 worth of additional social
value was delivered to the local community.19
The analysis is now applied across programs to
improve social performance and differentiate in
bidding for local government contracts.
Sompo Japan Nipponkoa Insurance Inc. hasapplied SROI analysis to their SAVE JAPANproject, to understand the social value ofincreasing public awareness and engagement
Sabic, SCG Chemicals, and Solvay. Find out more here: http://www.wbcsd.
org/work-program/sector-projects/chemical-sector/overview.aspx
1 8 . h t t p : / / w w w. b t p l c . c o m / B e t t e r f u t u r e / C o n n e c t e d S o c i e t y /Creatingpossibilities/Valueofdigitalinclusion/index.htm
1 9 . h t t p : / / w w w. v e o l i a . c o . u k / s i t e s / g / f i l e s / d v c 6 3 6 / f / a s s e t s /documents/2014/12/Social_value_brochure.pdf

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TOWARDS A SOCIAL CAPITAL PROTOCOL

Emerging monetization approaches:
Beyond SROI, companies are increasingly
seeking to use monetization approaches tobetter understand and demonstrate social
impacts and dependencies in a variety ofcontexts.
Ambuja Cement, a Group company of Holcim in
India, worked with KPMG and their True Value
Methodology21 to create the first ever Socialand Environmental Profit and Loss statement22.
The approach aims to value both the positive
and negative externalities of the business andadd this to financial value created in order tounderstand the ‘true value’ of the business.
Using this effort as a pilot, both Holcim andAmbuja aim to use the True Value approach tostrengthen their license-to-operate, interact withstakeholders, and gain competitive advantage
by anticipating future changes in regulation or
resource availability.
Masisa has worked with PWC to adapt the
Total Impact Measurement and Management(TIMM)23 approach to monetize social andenvironmental performance within its company
balanced scorecard. The assessment consideredboth the financial value to the company, andthe value for people and the environment
in five core areas. For example, the research
indicated that the RED M network, an initiative
which strengthens the businesses of the small
and medium carpenters who are Masisa’sclients, increased sales in one year by 9.2%
compared to a control group. The amount ofcarpenters impacted was estimated at 4000
20. http://www.sjnk.co.jp/english/news/sj/2014/2014070201contents/
21. http://www.kpmg.com/truevalue
22. http://www.ambujacement.com/truevalue/
23.http://www.pwc.com/totalimpact

in Chile. Masisa is using such insights to guidecommercial decisions, steer corporate strategy,
and improve the accuracy and transparency of
public reporting to stakeholders24.
SCA conducted a study which found that theirincontinence care initiatives from 2009 to 2013
in Shanghai, Beijing and Guangdong havereached over 100,000 incontinence sufferers,
and contributed US$ 44 million in societal value.
The greatest contribution to this figure wasthrough the value of quality of life improvement,
which was measured by considering factors suchas an increased ability to work, less emotional
distress, reduction in the routine costs ofincontinence care and prevention of secondary
diseases. SCA is using this information to raiseawareness around shared value creation, howinnovative incontinence solutions create value
for society and individuals as well as help drive
informed decisions by governments, policy
makers, and hospital management.
Most recently, Nestlé has embarked on an effort
to better understand approaches to measuringand monetizing social and environmental
impacts. Partnering with Quantis and Groupe
AGECO, Nestlé conducted a study aiming tocalculate a value for environmental impacts, anddefine how to carry out a similar assessment of
their social impacts. The results shed light on
the potential of emerging approaches and the
additional work required to successfully apply
these within a company. As well as continuing
to develop and pilot their approach internally,
Nestlé is initiating formal discussions withbusinesses and organizations working in thisarea, including through WBCSD, in the belief
that collaboration is essential to bring credibility
and rigor to this new field.
These are just a few examples of business action.
There are, of course, many more initiatives
ongoing within and between companies, and
WBCSD members are keen to collaborate forfurther alignment and faster progress. The
Social Capital Protocol will provide a structure
and platform to harmonize these activities
and advance the effective use of social capital
information in decision-making.

24. See here for further details in Spanish: http://www.MASISA.com/medios/archivos/desarrollososteniblechile/metodologia-monetizacion.pdf.
Casestudy in English forthcoming on WBCSDs website.

SECTION 3

in environmental conservation activities. A
cumulative total of 325 events were held during
the three-year period starting from FY2011, withmore than 18,000 local citizens participating.
The result of FY2013’s SROI improved showing
the fact that social value of the project exceeded
the cost of investment by 112%. The results
will be shared with stakeholders and used forcontinual improvement of the program20 and
Sompo Japan Nipponkoa is now investigating
the use of valuation approaches to demonstrate
the social value of new products and initiatives,
particularly to support entry into new andemerging markets.

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TOWARDS A SOCIAL CAPITAL PROTOCOL

The road ahead
The WBCSD will provide a platform tobring together the companies, experts andpractitioners who can contribute towards
making this proposal a reality.

Kicking off collaboration

SECTION 4

We are hitting the ground running, and are
already shaping collaboration with initial
partners and experts to advance particular
aspects of the protocol, including the following
organizations:
The B TeamAs part of ‘Plan B for Business’, the B Team leaders
will capitalize on their experience in Natural
Capital Accounting, their involvement in the
Natural Capital protocol and their significant
convening power to contribute to piloting,standardizing and scaling new metrics. This will
include, but not be limited to advancing Social
Profit and Loss accounting.
CIRAIG (International Reference Centre for theLive Cycle of Products, Processes and Services)
As a leading center of expertise in life cycle
issues, the CIRAIG will contribute through its
solid scientific research work and ten years ofapplied experience in life cycle thinking. In
particular, the CIRAIG has made huge strides
in terms of applying Social LCA to case studies
in collaboration with its international partners
through its International Life Cycle Chair.
The Global Impact Investing Network
The GIIN offers the IRIS catalog of social,environmental, and financial performance
metrics as a free public good to support
transparency, credibility, and accountability inimpact measurement practices. Through its IRIS
initiative, the GIIN will work together with otherstandards setters to harmonize, develop, andoffer standard metrics and guidance, aiming tohelp create access to more reliable and usefuldata for decision-making.

The Grameen Foundation
With deep expertise in the area of poverty
measurement through development of theProgress out of Poverty Index (PPI), theGrameen Foundation will collaborate in theareas of standardized indicators and metrics,
scaling social impact tools and embedding theuse of social impact information in operations
and decision-making.
IFC
IFC contributes as a knowledge partner sharing
lessons from its operational experience insocial sustainability issues facing the private
sector, with a view towards mutual sharing andlearning across partners.
Initiative for Global Development (IGD)
Building on experience gained through IGD
IMPACT, a business-driven framework tomeasure corporate socio-economic impacts,
IGD will share technical insights on developing
and applying generic and sector-specificframeworks. Through their network of senior
executives and ongoing events, IGD will bringlearnings and engagement opportunities fromthe Social Capital Protocol project to an Africanbusiness audience.
The Roundtable for Product Social Metrics
Consisting of 10 multinational companies who
have collaborated to develop the Handbook
for Product Social Impact Assessment, theRoundtable will bring experience in moving
towards harmonization of methodologies,
impact categories and performance indicators.
The group aims to engage with other companies
and initiatives, and address cross-cutting
implementation issues.
The Social Return on Investment (SROI) Network
Drawing on their pioneering position in themeasurement of social value, the SROI Network
will convene experts across social enterprise,
impact investing and the public sector tocollaborate with business to advance thetechnical practice of valuation and monetization.

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TOWARDS A SOCIAL CAPITAL PROTOCOL

The William Davidson Institute (WDI), at the
University of Michigan
The WBCSD has a long-standing relationshipwith the WDI through the creation of theBase of the Pyramid (BoP) Roadmap and, inparticular, the Mutual Value Creation Initiative.
This initiative is tasked with establishing alearning community and providing support andguidance on the entire process of impact datacollection and analysis in the BoP domain.

Engagement Opportunities
With this publication, The WBCSD is extending
an open invitation to collaborate in the following
ways:
Share methodologies, tools and guidelines we will compile, harmonize and build upon
approaches that are already in existence. If
your organization is providing, developing,or using an approach which could contributeto the emerging Social Capital Protocol, itsconsideration could help to speed the protocol's
development and expand the reach andinfluence of your tool.

If your organization is able to provide funding
or in-kind support, we are seeking contributions
to drive technical developments, resource
pilots, host workshops and events, or drive theongoing establishment and ownership of tools
and resources.
Pilot the protocol - we will pilot elements ofthe protocol as they are developed. If yourcompany is working on measuring and valuing
its impacts and dependencies on society, then
we invite you to join forces to apply the codeveloped approaches within your company,
provide feedback and contribute to iterative
development.
Champion the cause - we will be callingupon colleagues, partners and friends to raiseawareness. Join us in promoting the Social
Capital Protocol initiative, engaging others anddriving the understanding that harmonizedapproaches to the measurement and valuationof social capital will benefit both business andsociety.
We hope you will join us and add yourcontribution to this collaborative effort. Visit
www.wbcsd.org/socialcapital.aspx to find out
more.

Join the working group - we will draw fromdiverse perspectives and a broad range ofexpertise. If your organization is interested
in advancing corporate measurement andvaluation, we would welcome your contribution
to the technical development of principles,
processes and tools.
Serve as an expert reviewer - we will engage
subject matter experts for guidance and review.
If your organization holds a specialism in asocial subject-area, we would appreciate yourexpertise with regards to particular social issues
or technical approaches.
Provide funding or in-kind support - WBCSD
cannot support the broad range of activities
required to make the protocol a success by itself.

$

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The ultimate aim is to move towards global
social accounting standards which could beapplicable by the private sector and others.

18

TOWARDS A SOCIAL CAPITAL PROTOCOLACKNOWLEDGEMENTS
The WBCSD would like to warmly thank the following people for their contributions to the preparationof this document:

The Redefining Value Board
Katherine Garrett-Cox 		
Aileen Lee 			Marie-Claire Daveu 		José Roberto Lettiere 		
José Lopez 			
Kersti Strandqvist 		
Masatoshi Sato 			Jean-Marc Huet 			Alliance Trust
The Gordon and Betty Moore Foundation
KeringNaturaNestlé
SCA
Sompo Japan Nipponkoa Insurance Inc.
UnileverCompany representatives
Lynne Dalgarno 		
Alliance Trust
Annie Heaton			
ArcelorMittal
Anna Easton 			BT
Gaelle Nicolle			
DSM
Ariane Lüthi 			
HolcimPier Gribaudi			
HolcimYasemin Saltuk			
J.P. Morgan
Michael Beutler			KeringWim Bartels
		KPMG
Barend van Bergen		
KPMG
Janne Dietz 			
KPMG
Alan Kreisberg 			Lafarge
Francisca Tondreau 		
MasisaDuncan Pollard			
Nestlé
Stuart Jefford			
PWC
Geoff Lane			
PWC
Ursula Fischler-Strasak		
RocheAnna Swaithes			
SABMiller
Cecilia Zevallos			
SABMiller
Anna Brodowsky		
SCA
Thomas Andre			
Schneider Electric
Joachim Poesch			SolvayAdam Ichikawa			Sompo Japan Nipponkoa Insurance Inc.
Kevin Hurst			
VeoliaSonia Ouldali			
Veolia$19

TOWARDS A SOCIAL CAPITAL PROTOCOL

Partners and expert reviewers
Jean-Michel Couture		
Julie Parent			
Holly Dublin			
Steve Young			Sebastian Bigorito		Jean-Pierre Reverét		
Sara Russo Garrido		
Aron Horvath			
Kelly McCarthy			Christine Weinreich		Lisa Peterskovsky		Julie Peachey 			Richard Spencer			
Felicity Ann Kolp		
Reidar Kvam			
Helen Mant 			Ichiro Toda			
Sandra Darville			
Ulrike Haarsager			Joao Fontes			Mark Goedkoop			Douglas Park 			
Jeremy Nicholls			
Heather Esper			Colm Fay 			

AGÉCO
AGÉCO
The B Team
Caux Round Table
CEADS
CIRAIGCIRAIGCSR Europe
GIIN
GIZ
GIZ
The Grameen Foundation
ICAEW
IFC
IFC
Initiative for Global Development
Inter-American Development BankInter-American Development BankInter-American Development Bank
PRé Sustainability
Pré Sustainability
SASB
The SROI Network
The William Davidson Institute
The William Davidson Institute

The writing and publication of this document was managed by Kitrhona Cerri at the WBCSD secretariat.
Designer:
Sukie Procter
Version 1.0 (2015):
Redefining Value: Towards a Social Capital Protocol
Copyright:© WBCSD, April 2015
ISBN:
978-2-940521-19-7

Disclaimer
This publication is released in the name of the WBCSD. Like other WBCSD publications, it is the resultof a collaborative effort by members of the secretariat and senior executives from member companies.
A wide range of members reviewed drafts, thereby ensuring that the document broadly represents
the perspective of the WBCSD membership. It does not mean, however, that every member company
agrees with every word.

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World Business Council for Sustainable Development

www.wbcsd.org

Maison de la Paix, Chemin Eugene-Rigot 2, CP 246,1211 Geneve 21, Switzerland.Tel: +41 (0)22 839 31 00, E-mail: info@wbcsd.org