#15 GKC | 🤝 Mapping Impact Outcomes and Financial Values with SVI (SROI Value Map)

Happy Friday! Another week, another exciting learning on impact measurement :)

Continuing our Know Your Investors Series, in collaboration with Turbo Net Zero.

Turbo Net Zero is a pure-play sustainability consultancy company focuses on delivering ESG value-creation solutions for corporates and investors.

We’ll discuss about the evolving field of impact investing across Southeast Asia in three parts.

1. Overview of global impact investing frameworks (Today’s Episode)

2. Sector-specific impact themes within SEA

3. Case studies of successful impact investors and companies in SEA

Let’s get started!

Introducing The Social Value Innovation (SVI)’s Principles-Based Approach

SVI’s principles-based approach is a reliable resource for organizations seeking to embed social value into their decision-making processes. SVI principles are widely adopted, with users spanning industries such as healthcare, education, and sustainable development.

SVI’s principles are known for their flexibility, allowing organizations of various sizes to implement them effectively in their social impact initiatives. It is compatible to global standards such as Global Reporting Initiative (GRI), Impact Management Platform (IMP), and Sustainability Accounting Standards Board (SASB).

SROI Value Map

One application is the use of the Social Return on Investment (SROI) framework, which was promoted by SVI as a tool to measure the social, environmental, and economic impacts of an organization’s activities.

It assigns monetary values to non-financial outcomes, such as improved health, education, or community well-being, enabling organizations to calculate the value generated relative to the resources invested.

SROI calculations involve identifying positive and negative outcomes, monetizing these outcomes, and calculating a ratio that shows the social value created for every £1 invested. The basic SROI formula is:

SROI = (Value of outcomes – Negative impacts) / Investment made

For example, an SROI ratio of 4:1 means that for every £1 invested, £4 of social value is generated. This provides a clear understanding of how an organization's efforts translate into real-world impact, in financial terms.

To assist organizations with this process, an Excel sheet is available on the SVI website that includes preset formulas and detailed guidance on conducting an SROI analysis. 

Who Uses the SVI Framework and Why

Here's how the principles are applied by different key users:

• Practitioners: Professionals who prepare social value reports and accounts, using the principles to measure changes in people’s lives.

• Decision Makers: Senior leaders and investors who use social value metrics to guide decisions and reduce inequalities.

• Assurance Providers: Independent parties who validate that social value reports fairly represent the real-world impacts of an organization’s activities.

• Sustainability Standard Setters: People who work on other approaches to social value accounting and reporting.

• Policy Makers: Those who use social value data to inform policies and ensure they reflect the well-being of affected communities.

Case Study: UK’s Charity Shop

UK’s Charity shops, which raise funds for charitable causes by selling donated goods, play a significant role in promoting sustainable consumption and providing essential services to communities.

According to the Charity Retail Association's research, these shops generate £4.61 of social value for every £1 invested, contributing millions of pounds in positive social impact.

Steps for Applying the SROI Model

1. Data Collection: Charity shops gathered data through surveys and interviews, covering metrics like volunteer hours, reuse of donated goods, and community engagement.

2. Monetizing Social Value: The collected data was then translated into financial terms. For example, the mental health benefits experienced by volunteers and the reduction in waste through the reuse of goods were assigned economic values.

3. Calculating Social Return: Using the SROI model, the analysis concluded that a total of £75.3 billion of social value was generated by UK charity shops and for every £1 invested, charity shops generated £4.61 in social value.

Key Takeaways

By leveraging tools like SROI and the Social Value Self-Assessment Tool, Southeast Asian organizations can ensure they are driving meaningful, long-term social change while aligning with global best practices.

Next week, we will explore another impact tool, Driving Impact with B Impact Assessment (BIA) by B Corporations. Stay tuned!

Again, thank you Turbo Net Zero for this amazing content collaboration.

If you are an impact investor looking to implement ESG strategies OR corporates exploring impact measurement strategies, hit Kenny up!

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Hope this is helpful! 🙂 

Feel free to reach out via LinkedIn or email if you have more questions.

References

• Social Value International Introduction

• The Principles of Social Value

• SROI Value Map

• SROI Value Map Excel Spreadsheet Example

• Purpose of SVI

• UK’s Charity Shops

• The Social Value Self Assessment Tool