What

For each priority social & human capital issue identified in Stage 1, companies will determine the key audience and objectives and set the organizational, geographic, and temporal boundaries for measurement and valuation. These will be used to develop an ‘impact pathway’ (or ‘dependency pathway’) that provides a hypothesis for how business activities translate into social impacts and/or dependencies and helps identify what the company should assess. The steps in this stage are likely to be iterative and to inform one another, so the results of one step may require revisiting a preceding step. This is normal and should be factored in to any assessment timeline.

Why

This stage ensures that the effort of measurement and valuation is targeted appropriately and produces fit-for-purpose results.

How

Step 4. Determine target audience and objectives

The first part of setting the scope of the assessment is determining the target audience and the specific objectives for measurement and valuation.

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Step 5. Set boundaries

Agreeing on the boundaries of the approach from the outset is important from both a conceptual and practical perspective. It not only provides clarity and focuses the approach, but also ensures that resources are used efficiently and effectively.

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Step 6. Define the impact pathway

The last step in Stage 2 draws the links between the social & human capital issues identified in Step 1 and the business activities that affect or rely on them.

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Outputs

By the end of Stage 2, companies should have an understanding of:

  • Who the target audience(s) is(are) for the assessment and how their needs might be reflected in the choice of scope and objective;
  • What organizational, geographic, and temporal boundaries the assessment is going to cover within the limits of resources available;
  • The links in the pathway that connect a business activity to the material social & human capital issues identified in Stage 1, and any indirect or unintended effects that are caused by the business activity; and
  • Which material outcomes and impacts the company should measure and value to achieve the objective of the assessment.