Sustainability experts understand impact valuation as the assessment of the company's influence on outsiders and the environment, expressed in a currency (dollar value, euro value, etc.).
What impact does a company have on society? There is a value in employing members of a community, paying taxes and offering products or services that can improve the quality of life. Companies also have an impact on the environment, how they give back to the community, on other companies and in so many more ways.
There’s no question that companies have a social impact. The question many struggle with, is how to measure and value that impact. The issue gets more complicated if social impact should be valued in a way that is comparable with other companies.
At Obermatt, our core business is about measuring performance and placing that performance in relation to others. When it comes to measuring the social impact of for-profit companies, we don’t recommend assigning a numerical financial value to assess social impact. Many areas are difficult - even an ethical challenge - to quantify.
For example, what value does one place on employee accidents or even fatalities? Even monetary values like taxes paid do not paint an unequivocal picture of the social impact of one company versus another.
Obermatt recommends looking to rating agencies and their assessment of performance for guidance about how corporations should approach this challenge. These include a broader view of a company’s social impact and contribution which is then set to a grading scale, not numerical values.
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