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Social indicators

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The emergence of 'triple bottom line' accounting has prompted many organizations to take a more objective look at their impacts on people and communities, rather than focusing on environmental impacts alone.

However, while environmental effects are usually straightforward to quantify and to set targets for, social aspects can be more elusive.

One way in which companies can check their performance, and set targets for improvement, is by using the 'SA 8000' standard for social accountability, created in 2000 by the Council on Economic Priorities Accreditation Agency (CEPAA). A detailed description of SA8000 can be found in the 'Strategies & tools' section of the site.

The fact that social accounting is a relatively new concept for most companies is reflected in the findings of a survey by UK-based consultancy Environmental Resources Management (ERM), conducted at the end of 2001. This examined the way social impacts are reported by the top 100 companies in the UK, and found that 79 of them published at least some information on social issues relating to their business.

However, only a quarter of those 79 used quantitative performance data to support their claims.

Moreover, the ERM report voiced 'serious doubts' about the quality of the reporting. For example, 'hardly any' of the companies gave any figures on the proportion of women occupying senior management positions, and none indicated the number of working days lost through stress.

Top ten social topics reported

  1. Community (44)
  2. Health & safety (32)
  3. Employment (29)
  4. Training & education (13)
  5. Charitable donations (11)
  6. Ethics (11)
  7. Supply chain (10)
  8. Human rights (9)
  9. Socially responsible investment (6)
  10. Child labour (4)

The ERM study also compared different industry sectors, and found that the worst performers were media, information technology and telecommunications. The best-quality reports on social indicators were by companies in the utilities, mining, and oil and gas sectors.

'Social indicator use is still sporadic at best,' concludes Tom Woollard, corporate advisory services director at ERM. 'To be at the leading edge of corporate reporting, companies will need to start publishing indicators on health and safety, employment, community affairs and community involvement at the very least.'

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